When the government employs a combination of higher taxes and lower spending, this type of policy is called a:
A) contractionary fiscal policy.
B) contractionary trade policy.
C) contractionary monetary policy.
D) contractionary exchange rate policy.
E) an inflationary policy

Question

Quizplus · Accepted Answer

This combination is known as a contractionary fiscal policy, aimed at reducing the amount of money available for businesses and consumers to spend, typically to combat inflation.

When the Government Employs a Combination of Higher Taxes and Lower