Fiscal austerity is _____ fiscal policy, such as _____ in government spending and tax _____ designed to _____ unemployment and _____.
A)expansionary; increases; cuts; reduce; increase output
B)expansionary; increases; cuts; increase; decrease output
C)contractionary; decreases; increases; ignore; reduce budget deficits
D)contractionary; decreases; increases; ignore; increase budget deficits

Question

Quizplus · Accepted Answer

Fiscal austerity is contractionary fiscal policy, which involves reducing government spending and increasing taxes to reduce budget deficits. It is not expansionary, as it does not aim to increase output or employment. The correct choices are therefore C: contractionary policy; decreases in government spending; increases in taxes; and the goal of reducing budget deficits.

Fiscal Austerity Is _____ Fiscal Policy, Such as _____ in Government

Fiscal Austerity Is _ Fiscal Policy, Such as _ in Government