{"id":91320,"date":"2025-06-01T10:53:18","date_gmt":"2025-06-01T10:53:18","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=91320"},"modified":"2025-06-01T10:53:18","modified_gmt":"2025-06-01T10:53:18","slug":"with-reference-to-inflation-in-india-which-of-the-following-statement","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/","title":{"rendered":"With reference to inflation in India, which of the following statement"},"content":{"rendered":"

With reference to inflation in India, which of the following statements is correct?<\/p>\n

[amp_mcq option1=”Controlling the inflation in India is the responsibility of the Government of India only” option2=”The Reserve Bank of India has no role in controlling the inflation” option3=”Decreased money circulation helps in controlling the inflation” option4=”Increased money circulation helps in controlling the inflation” correct=”option3″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC IAS – 2015<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nThe correct option is C (Decreased money circulation helps in controlling the inflation).
\n<\/section>\n
\n– Inflation is generally caused by excessive demand or reduced supply, often fuelled by an increase in the money supply beyond the growth of output.
\n– Controlling inflation is a joint responsibility of the government and the central bank (RBI). The RBI is statutorily mandated to maintain price stability, often through monetary policy. Therefore, A and B are incorrect.
\n– Monetary policy tools aimed at controlling inflation typically involve reducing the money supply and credit availability or increasing interest rates, which leads to decreased money circulation (tight monetary policy). This curbs aggregate demand, helping to cool down inflationary pressures.
\n– Increased money circulation (loose or expansionary monetary policy) typically stimulates demand and can exacerbate inflation. Therefore, D is incorrect.
\n<\/section>\n
\nThe Government sets an inflation target for the RBI (currently 4% with a band of +\/- 2%). The RBI uses various instruments like Repo rate, Reverse Repo rate, CRR, SLR, and OMOs to manage liquidity and influence inflation. Fiscal measures like controlling government expenditure, taxation, and managing supply-side issues also play a role in controlling inflation.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

With reference to inflation in India, which of the following statements is correct? [amp_mcq option1=”Controlling the inflation in India is the responsibility of the Government of India only” option2=”The Reserve Bank of India has no role in controlling the inflation” option3=”Decreased money circulation helps in controlling the inflation” option4=”Increased money circulation helps in controlling the … <\/p>\n

Detailed SolutionWith reference to inflation in India, which of the following statement<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1443,1120,1261],"class_list":["post-91320","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1443","tag-economic-development","tag-nature-of-indian-economy","no-featured-image-padding"],"yoast_head":"\nWith reference to inflation in India, which of the following statement<\/title>\n<meta name=\"description\" content=\"The correct option is C (Decreased money circulation helps in controlling the inflation). - Inflation is generally caused by excessive demand or reduced supply, often fuelled by an increase in the money supply beyond the growth of output. - Controlling inflation is a joint responsibility of the government and the central bank (RBI). The RBI is statutorily mandated to maintain price stability, often through monetary policy. Therefore, A and B are incorrect. - Monetary policy tools aimed at controlling inflation typically involve reducing the money supply and credit availability or increasing interest rates, which leads to decreased money circulation (tight monetary policy). This curbs aggregate demand, helping to cool down inflationary pressures. - Increased money circulation (loose or expansionary monetary policy) typically stimulates demand and can exacerbate inflation. Therefore, D is incorrect.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"With reference to inflation in India, which of the following statement\" \/>\n<meta property=\"og:description\" content=\"The correct option is C (Decreased money circulation helps in controlling the inflation). - Inflation is generally caused by excessive demand or reduced supply, often fuelled by an increase in the money supply beyond the growth of output. - Controlling inflation is a joint responsibility of the government and the central bank (RBI). The RBI is statutorily mandated to maintain price stability, often through monetary policy. Therefore, A and B are incorrect. - Monetary policy tools aimed at controlling inflation typically involve reducing the money supply and credit availability or increasing interest rates, which leads to decreased money circulation (tight monetary policy). This curbs aggregate demand, helping to cool down inflationary pressures. - Increased money circulation (loose or expansionary monetary policy) typically stimulates demand and can exacerbate inflation. Therefore, D is incorrect.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:53:18+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"With reference to inflation in India, which of the following statement","description":"The correct option is C (Decreased money circulation helps in controlling the inflation). - Inflation is generally caused by excessive demand or reduced supply, often fuelled by an increase in the money supply beyond the growth of output. - Controlling inflation is a joint responsibility of the government and the central bank (RBI). The RBI is statutorily mandated to maintain price stability, often through monetary policy. Therefore, A and B are incorrect. - Monetary policy tools aimed at controlling inflation typically involve reducing the money supply and credit availability or increasing interest rates, which leads to decreased money circulation (tight monetary policy). This curbs aggregate demand, helping to cool down inflationary pressures. - Increased money circulation (loose or expansionary monetary policy) typically stimulates demand and can exacerbate inflation. Therefore, D is incorrect.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/","og_locale":"en_US","og_type":"article","og_title":"With reference to inflation in India, which of the following statement","og_description":"The correct option is C (Decreased money circulation helps in controlling the inflation). - Inflation is generally caused by excessive demand or reduced supply, often fuelled by an increase in the money supply beyond the growth of output. - Controlling inflation is a joint responsibility of the government and the central bank (RBI). The RBI is statutorily mandated to maintain price stability, often through monetary policy. Therefore, A and B are incorrect. - Monetary policy tools aimed at controlling inflation typically involve reducing the money supply and credit availability or increasing interest rates, which leads to decreased money circulation (tight monetary policy). This curbs aggregate demand, helping to cool down inflationary pressures. - Increased money circulation (loose or expansionary monetary policy) typically stimulates demand and can exacerbate inflation. Therefore, D is incorrect.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T10:53:18+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/","url":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/","name":"With reference to inflation in India, which of the following statement","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T10:53:18+00:00","dateModified":"2025-06-01T10:53:18+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The correct option is C (Decreased money circulation helps in controlling the inflation). - Inflation is generally caused by excessive demand or reduced supply, often fuelled by an increase in the money supply beyond the growth of output. - Controlling inflation is a joint responsibility of the government and the central bank (RBI). The RBI is statutorily mandated to maintain price stability, often through monetary policy. Therefore, A and B are incorrect. - Monetary policy tools aimed at controlling inflation typically involve reducing the money supply and credit availability or increasing interest rates, which leads to decreased money circulation (tight monetary policy). This curbs aggregate demand, helping to cool down inflationary pressures. - Increased money circulation (loose or expansionary monetary policy) typically stimulates demand and can exacerbate inflation. Therefore, D is incorrect.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-inflation-in-india-which-of-the-following-statement\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"With reference to inflation in India, which of the following statement"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91320","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=91320"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91320\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=91320"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=91320"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=91320"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}