To contain inflation, what supply side measures should be taken by the government?
1. Postponing the public expenditure
2. Increase taxation to extract liquidity from system
3. Maintaining price levels through the effective PDS
Choose the correct option from the codes given below:
Postponing the public expenditure would result in the decrease of demand so its an incorrect option because its not a supply side measure. Increase in taxation would also leave lesser money with the people to spend thus, making it a demand side measure. Correct option is 3 only.
This question is a part of GKToday's Integrated IAS General Studies Module