Which of these is a policy designed to lower/restrain aggregate demand?
A) lower taxes
B) increased government spending
C) increased protective tariffs
D) decreased government spending
E) none of the above

Question

Quizplus · Accepted Answer

Decreased government spending is a policy designed to lower/restrain aggregate demand. When the government spends less, there is less money circulating in the economy, which can help reduce inflationary pressure by decreasing demand for goods and services. On the other hand, lower taxes and increased government spending, as well as increased protective tariffs, can all potentially increase aggregate demand. Therefore, D is the correct answer.

Which of These Is a Policy Designed to Lower/restrain Aggregate