Question

Long term solution to improve inflation is​

Answer 1

Explanation:

Monetary policy – Higher interest rates reduce demand in the economy, leading to lower economic growth and lower inflation.

Other Policies to Reduce Inflation

• Higher interest rates (tightening monetary policy)
• Reducing budget deficit (deflationary fiscal policy)
• Control of money being created by the government.

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Answer 2

Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Governments can also employ a contractionary monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates.

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