{"id":39686,"date":"2024-04-26T12:42:53","date_gmt":"2024-04-26T12:42:53","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=39686"},"modified":"2024-04-26T12:42:54","modified_gmt":"2024-04-26T12:42:54","slug":"upsc-prelims-2015-question-87","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-87\/","title":{"rendered":"UPSC Prelims 2015 &#8211; Question 87"},"content":{"rendered":"\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69d5cd9fac114\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d5cd9fac114\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-87\/#87With_reference_to_inflation_in_India_which_of_the_following_statements_is_correct\" title=\"87.With reference to inflation in India, which of the following statements is correct?\">87.With reference to inflation in India, which of the following statements is correct?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-87\/#The_correct_answer_is%E2%80%AFOption_3\" title=\"The correct answer is\u202fOption 3.&nbsp;\">The correct answer is\u202fOption 3.&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-87\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" title=\"In case you still have your doubts, contact us on 9811333901.&nbsp;\">In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"87With_reference_to_inflation_in_India_which_of_the_following_statements_is_correct\"><\/span>87.With reference to inflation in India, which of the<br>following statements is correct?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\"><li>a) Controlling the inflation in India is the responsibility of the Government of India only<\/li><li>b) The Reserve Bank of India has no role in controlling the inflation<\/li><li>c) Decreased money circulation helps in controlling the inflation<\/li><li>d) Increased money circulation helpsin controlling the inflation<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_correct_answer_is%E2%80%AFOption_3\"><\/span>The correct answer is\u202f<strong>Option 3.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Inflation\u00a0<\/strong>\u00a0<ul><li>It refers to the general\u202f<strong>increase in the prices of goods and services<\/strong>\u202fin an economy over some time.\u00a0<\/li><li>If the\u202fmoney supply\u202fincreases than the economy&#8217;s ability to produce goods and services, then inflation\u202fwill also increase.\u00a0<\/li><li>During the high inflation period, the government can\u202f<strong>reduce spending to decrease the\u202fmoney circulation<\/strong>\u202fin the\u202fcountry.\u00a0<\/li><li><strong>Therefore, decreased money circulation helps in controlling inflation. Hence, Option 3 is correct.<\/strong>\u00a0<\/li><li>Sterilization\u202fis the process under which the\u202fRBI\u202fabsorbs excess liquidity in the economy.\u00a0<\/li><li><strong>The Central Bank of\u202fIndia<\/strong>\u202fis the authority to\u202f<strong>control inflation<\/strong>\u202fthrough monetary policies which it does by increasing bank rates, repo rates, cash reserve ratio, buying dollars, and regulating money supply and availability of credit.\u00a0<\/li><\/ul><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688\" width=\"781\" height=\"182\"\/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-c6ab63ae-7083-4831-b519-cb89dacafb18\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p id=\"block-52c5a91b-6ed6-46e3-b781-7cc0c63a0b76\">For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p id=\"block-d014fe86-d628-49d8-82ce-6c60dc6e7a73\">For Daily Updates and Study Material:<\/p>\n\n\n\n<p id=\"block-38177954-e668-4d8d-b250-d0fbd5a09390\">Join our Telegram Channel \u2013&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\" id=\"block-49ca2fe3-109f-4a88-b72e-9df49c3d328e\"><li>1. 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