Inflation can be curbed by _______

  • A Deficit budget
  • B Paying higher wages
  • C Increased aggregate demand
  • D Reducing aggregate demand

The correct answer is D. Reducing aggregate demand

In order to curb inflation, reducing aggregate demand is generally considered an effective measure. Therefore, the correct option is Reducing aggregate demand.

When aggregate demand exceeds the available supply of goods and services in an economy, it can lead to inflationary pressures.

By reducing aggregate demand, either through fiscal or monetary policies, the government can control inflation.

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