If the government were to reduce spending on the school lunch program, it would be enacting:
A) contractionary fiscal policy.
B) expansionary fiscal policy.
C) contractionary monetary policy.
D) expansionary monetary policy.

Question

Quizplus · Accepted Answer

Reducing spending on the school lunch program is an example of contractionary fiscal policy, as it involves cutting government expenditure. This policy aims to decrease the overall level of aggregate demand in the economy by reducing government spending, which can help to control inflation and balance the government's budget.

If the Government Were to Reduce Spending on the School