Question

the government did not keep silence during the inflatory situation how do they address them?
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Answer 1

Answer:

Demand-pull inflation – aggregate demand growing faster than aggregate supply (growth too rapid)

Cost-push inflation – For example, higher oil prices feeding through into higher costs.

Devaluation – increasing cost of imported goods, and also the boost to domestic demand.

Answer 2

Government can address the inflatory situation by :

1. Lowering the prices of essential goods and services which are absolutely required for the convenience of the public.

2. Stopping black marketing and hoarding of scarce goods for profit making.

3. The corrupt government officials must be arrested and brought to court. This will ensure proper functioning of the system and ensure the people live properly without any fraud.