What could be proper remedy for controlling the inflation?



Answer:
Your question is a lot more complicated than it seems.

It really depends on the source of the inflation. It could be that the central bank is being too lax. In that case, an increase in interest rates is the right policy response.

However, suppose that the government is being lax by spending like crazy. This would also put pressure on goods prices and crowd out private spending and private investment. In this case, reining in fiscal policy is the right approach. Of course, if that doesn't work, then the central bank might need to raise interest rates further to make it really expenive for the fiscal wackos.
Increase interest rates is a remedy that slows inflation.

The answers post by the user, for information only, FunQA.com does not guarantee the right.



More Questions and Answers:
More Questions and Answers:
  • Do TNCs Exploit Workers in LEDCs?
  • why do the poverty in india is high when compared to other countries?
  • What are some current events that you believe may shift the aggregate expenditures function up or down.?
  • what are the flow and goods of the U.S functions?
  • Would you give up your 20 years of your lifespan in exchange for USD 50 million?
  • what are the implications of social influence for individuals and or organizations?
  • If the minimum wage is increased, will this effect the federal poverty line?
  • Do people from other countries still aspire to come to America?
  • what was the historical impact that the railroad had on the us economy?