An example of contractionary fiscal policy is
A) increasing government spending.
B) increasing taxes.
C) decreasing government spending.
D) decreasing taxes.
E) b and c

Question

Quizplus · Accepted Answer

Contractionary fiscal policy aims to reduce inflation and slow down the economy. It includes increasing taxes (B) and decreasing government spending (C), both of which reduce the amount of money in circulation and slow economic activity.

An Example of Contractionary Fiscal Policy Is