Previous year MCQs

Economy UPPSC 1996 GS-I
Question

Which one of the following is NOT a method to control inflation?

Answer & Solution

Answer: (Detailed Solution Below)

Option C: Reducing the rate of interest

Detailed Solution:

The correct answer is “Reducing the rate of interest”.
Reducing the rate of interest typically stimulates borrowing and spending, which can increase aggregate demand and potentially worsen inflation. Therefore, lowering interest rates is generally not used to control inflation.

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