Which of the following is NOT a measure to control inflation?
A. Increase in bank rate
B. Open market sale of securities
C. Increase in CRR
D. Increase in government expenditure
Answer: Option D
Solution (By JKSSB Mock Tests)
Increase in government expenditure would increase aggregate demand and potentially worsen inflation. The other measures reduce money supply or credit and help control inflation.
Explanation:
The Taylor Rule prescribes that the central bank should set the nominal interest rate in response to deviations of inflation from target and of output from potential.
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