Q. Disinflation is associated with which one of the following policy actions by a central bank?
Answer: A
Notes:
Explanation – Disinflation refers to a slowdown in the rate of inflation, meaning that prices are still rising, but at a slower pace than before. A common policy action by central banks to achieve disinflation is to raise interest rates. By increasing interest rates, borrowing becomes more expensive, which reduces consumer and business spending. This decrease in demand helps to slow down the rate of inflation.
Source: DD News
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