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How can we reduce inflation rate of india through monetary policy?

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How can we reduce inflation rate of india through monetary policy?

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First of all we need to understand inflation and its effects then we can stress the need for reducing or controlling it. Measuring inflation is a question of econometrics, that is, finding objective ways of comparing nominal prices to real activity. In many places in economics, “real” variables need to be compared, in order to calculate GDP, effective interest rate and improvements in productivity. Each inflationary measure takes a “basket” of goods and services, then the prices of the items in the basket are compared to a previous time, then adjustments are made for the changes in the goods in the basket itself. For example if a month ago canned corn was sold in 10 oz. jars, and this month it is sold in 9.5 oz jars, then the prices of the two cans have to be adjusted for the contents. The result is the amount of increase in price which is attributed to “inflation” and not to improvements in productivity. This means that there are many measures of inflation, depending on which basket o

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