A potential tradeoff for reducing pressure on price levels associated with contractionary fiscal policy is

Question

Quizplus · Accepted Answer

Contractionary fiscal policy, which involves reducing government spending or increasing taxes, can lead to a decrease in aggregate demand. This reduction in demand can cause the economy to slow down, potentially leading to a loss of output as businesses produce less in response to decreased demand.

A Potential Tradeoff for Reducing Pressure on Price Levels Associated