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UPSC 2015: With reference to inflation in India, which of the following statements is correct?
(a)Controlling the inflation in India is the responsibility of the Government of India only
(b)The Reserve Bank of India has no role in controlling the inflation
(c)Decreased money circulation helps in controlling the inflation
(d)Increased money circulation helps in controlling the inflation
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Not attemptedCorrect Answer: (c) Decreased money circulation helps in controlling the inflation
Reducing the volume of money in circulation lowers aggregate demand; with less money chasing the same goods, price pressures ease and inflation moderates. Empirical RBI studies confirm a positive relationship between money-supply growth and inflation, so a contraction in money supply (decreased circulation) helps control inflation. ([jagranjosh.com](https://www.jagranjosh.com/articles/upsc-ias-prelims-2015-general-studiesanswer-key-1440307640-1?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2015 Indian Economy question?▼
The correct answer is option (c): Decreased money circulation helps in controlling the inflation. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Inflation & Price Indices question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2015, GS Paper 1, as Question 87. It falls under Indian Economy > Inflation & Price Indices.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Inflation & Price Indices?▼
UPSC has asked 15 questions from Inflation & Price Indices (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.