Which of the following is not a method to reduce the inflationary gap?
A)Increasing government spending
B)Reducing transfer payments
C)Raising taxes
D)Decreasing government expenditure

Question

Quizplus · Accepted Answer

Increasing government spending would actually exacerbate the inflationary gap as it would increase demand in the economy. The other three options would help reduce the inflationary gap by either reducing demand (reducing transfer payments, raising taxes) or reducing government intervention in the economy (decreasing government expenditure).

Which of the Following Is Not a Method to Reduce