Which of the following is an anti-inflationary measure that puts downward pressure on aggregate demand, causing the economy to slow down?

CA Foundation · Business Economics · PYQS · September 2025
Which of the following is an anti-inflationary measure that puts downward pressure on aggregate demand, causing the economy to slow down?
(A) A. Reduction in government spending.
(B) B. Increase in government spending.
(C) C. Decrease in interest rates.
(D) D. Decrease in taxes.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. Reduction in government spending.

Topics: Public Finance

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