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Explain the fiscal measures to overcome inflation. |
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Answer» Fiscal measures are the steps taken by government to control inflation. Government does so by its taxes and expenditure policy. Under it government tries to control aggregate demand- and increase aggregate supply by the way of taxation, public expenditure, and public debt policies. Government tries to control inflation by increasing direct taxes, public debts and investment in production activity. At the same time it also decreases its public expenditure and indirect taxes to control inflation. |
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