In 1965 during the Johnson administration, the U.S.economy was headed toward an inflationary gap.Which of the following policies would an economist recommend?

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During an inflationary gap, demand exceeds supply, leading to rising prices. To combat this, an economist would recommend a contractionary fiscal policy, which would involve a reduction in government spending or an increase in taxes. A tax increase would reduce disposable income, leading to a decrease in consumption and therefore reducing demand. This would help to close the inflationary gap and stabilize prices. Neither an open market purchase, a tax cut, nor an increase in defense spending would have the same contractionary effect on the economy.

In 1965 During the Johnson Administration, the U