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Consider the following objectives : 1. Control inflation 2. Control

June 1, 2025 by rawan239

Consider the following objectives :

1. Control inflation
2. Control fiscal deficit
3. Regulate foreign exchange rates
4. Regulate interest rates

Which of the above objectives are correct ?

1 and 2 only

3 and 4 only

1, 2 and 4 only

1, 2, 3 and 4

This question was previously asked in

UPSC Combined Section Officer – 2021-22

Download PDF Attempt Online

The correct answer is 1, 2, 3 and 4.

All the listed objectives (Control inflation, Control fiscal deficit, Regulate foreign exchange rates, Regulate interest rates) are standard and correct objectives typically pursued through macroeconomic policies by governments and central banks.

Inflation control and interest rate regulation are primarily within the domain of monetary policy, usually managed by the central bank. Fiscal deficit control is a key objective of fiscal policy, managed by the government. Regulation of foreign exchange rates can involve interventions by both the central bank and the government, depending on the exchange rate regime. These objectives are interconnected and crucial for economic stability and growth.

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