When an economy is experiencing inflationary pressures, measures need to be taken to stabilize prices and control inflation. The correct answer is option 1, which states that only direct taxes should be increased.

Direct taxes, such as income tax or corporate tax, are a means for the government to collect revenue from individuals and businesses. By increasing direct taxes, the government reduces the disposable income of individuals and reduces the spending power of businesses. This can help to reduce excess demand in the economy, which is one of the causes of inflation.

Option 2, which suggests reducing interest rates, is not an effective measure to combat inflation. Lowering interest rates encourages borrowing and spending, which can further stimulate demand and contribute to inflation.

Option 3, which recommends increasing public spending, can also worsen inflationary pressures. Increased government spending can boost demand in the economy, leading to higher prices and inflation.

In summary, when an economy is facing inflationary pressures, increasing direct taxes can be an effective measure to control inflation and stabilize prices. Alert - correct answer should be option 2 only, as reducing interest rates can encourage borrowing and spending, and this measure in turn can help reduce inflation and stimulate economic growth.