Multiple choice

Which measure can check inflation?

  1. Surplus budgeting

  2. Increase in direct taxation

  3. Curtailment in public expenditure

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

All three measures - surplus budgeting, increased direct taxation, and curtailment in public expenditure - can effectively check inflation. Surplus budgeting reduces aggregate demand in the economy. Higher direct taxes reduce disposable income, lowering demand. Curtailment of public expenditure directly reduces government spending, easing inflationary pressures. These are fiscal policy tools to control inflation.

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