CUET Preparation Today
| Read the following report carefully and answer the question on the basis of the same: In India, the wholesale price index (WPI) is the main measure of inflation. The WPI measures the price of a representative basket of wholesale goods. In India, the wholesale price index is divided into three groups: Fuel and Power (13.2 percent), Primary Articles (22.6 percent of total weight) and Manufactured Products (64.2 percent). Food Articles from the Primary Articles Group account for 15.2 percent of the total weight. The most important components of the Manufactured Products Group are Basic Metals (9.7 percent of total weight); Food products (9.1 percent); Chemicals and Chemical products (6.5 percent) and Textiles (4.9 percent). |
| With the view to correct the inflationary gap, which of the following monetary policy measures should be adopted? |
decrease in margin requirement decrease in cash reserve ratio sale of securities purchase of securities |
| sale of securities |
| Sale of securities will squeeze the money out of market thus help in controlling the inflation. |
