In situation of inflation the government should adopt
A) balanced budget
B) deficit budget
C)surplus budget
D)none of these

Dear Student,
In situation of inflation the government should adopt Surplus budget.
 A surplus budget implies that the revenue generated by the government from tax and non-tax sources is higher than the expenditure incurred by it. This reduces the supply of money prevailing in the economy as people are left with less money to spend due to an increase in revenue generated by government from people. 
Henceforth, Option (C) is correct.

Regards

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