The optimal time for the implementation of contractionary fiscal policy would be

Question

Quizplus · Accepted Answer

The optimal time for implementing contractionary fiscal policy would be before inflation accelerated because the policy is designed to curb inflationary pressures in the economy. If fiscal policy is implemented after inflation has already accelerated, it may not be effective in controlling inflation and could lead to a recession. Therefore, implementing contractionary fiscal policy before inflation has accelerated would be the best approach.

The Optimal Time for the Implementation of Contractionary Fiscal Policy