Fiscal policy that promotes,either directly or indirectly,the reduction of private and public spending would be appropriate when the economy is
A) experiencing a high rate of inflation.
B) experiencing a high rate of unemployment.
C) entering a recession.
D) exporting more than it imports.
E) experiencing rapidly falling price levels.

Question

Quizplus · Accepted Answer

Fiscal policy that promotes the reduction of private and public spending would be appropriate when the economy is experiencing a high rate of inflation. This is because reducing spending would lower aggregate demand and alleviate inflationary pressures.

Fiscal Policy That Promotes,either Directly or Indirectly,the Reduction of Private