There are different remedies to control inflation, which are sated below;
1) Monetary Measures
2) Fiscal Measures
1) Monetary Measures:
A detailed description of Monetary Measures is given below;
a) Monetary Policy:
The policy which is regulated be the central bank to control supply of money is known as Monetary Policy. Central Bank may use different instruments to control inflation.
b) Open Market Operation:
According to this, central bank sells government securities and bonds in the open market to control inflation.
C) Rate of Interest:
In this method rate of interest on loan is increased to check inflation.
2) Fiscal Measures
Fiscal Measures to control inflation are as follows;
a)Fiscal Policy:
This policy is regulated by the government to control inflation. During inflation government increases direct taxes and reduce it's expenditures on non productive activities.
b) Control Over Population:
Government should make efforts to solve the problem of over population.
c) Decrease Cost of Production:
Government should control the prices of basic necessities and raw materials which leads to increase in prices.
d) Control Shortage of Goods:
Government should take serious steps to minimize artificial shortage.
e) Increase in Production:
The best way to control inflation is that the production level of the country should be enhanced.
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