Analyse how fiscal policy measures could reduce inflation.

In order to control the demand-pull inflation, the Government undertakes some monetary measures and incorporates certain changes to the fiscal policy.One of the commonly used measures to control inflation is controlling the money supply in the economy. If the Government decreases the supply of money, then the demand will fall, leading to a fall in prices. Therefore, the Government may decide to withdraw certain paper notes and/or coins from circulation. This decreases the money supply.

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explanation:

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