Multiple choice

An effective short term measure to check inflation is to

  1. keep budgetary deficit under check

  2. enhance production of essential goods

  3. streamline public distribution system

  4. enhance production of all consumer goods
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A Correct answer
Explanation

Keeping the budgetary deficit under control is a direct monetary policy tool that reduces government borrowing from the market, leaving more funds available for private sector and reducing demand-pull inflation. The other options are long-term structural measures.

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