Multiple choice

The process of curing inflation by reducing money supply is called

  1. Cost-push inflation

  2. Demand-pull inflation

  3. Disinflation

  4. Reflation

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Disinflation refers to the deliberate reduction of inflation through monetary policy measures like decreasing money supply. Cost-push and demand-pull describe inflation causes, not cures, while reflation means increasing inflation to stimulate growth.