Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
5. Managing inflation and its impact on the savings rate requires a coordinated effort from policymakers, central banks, and individuals. Analyse. (250 words)
Difficulty level: Easy
Reference: Business Insider , Insights on India
Why the question:
The article explains the impact of inflation.
Key Demand of the question:
To write about inflation, its impact and measures needed to keep it under control.
Directive word:
Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.
Structure of the answer:
Introduction:
Begin by defining inflation.
Body:
First, write about the impact of inflation on various macroeconomic parameters – savings, purchasing power, growth, cost of living, availability of credit and exchange rates etc.
Next, write about the measures that are taken to keep inflation under tolerable limits – the monetary policy measures, fiscal policy measures and price control measures.
Conclusion:
Conclude by writing a way forward.
