If the economy is experiencing inflation, then the most appropriate government policy would be to:
A) shift the aggregate demand curve by using a tax increase coupled with spending cuts.
B) shift the aggregate demand curve by using a tax increase coupled with more spending.
C) shift the aggregate demand curve by using a tax cut coupled with spending cuts.
D) shift the aggregate demand curve by using a tax cut coupled with more spending.
E) shift the aggregate supply curve by using a tax cut coupled with spending cuts.

Question

Quizplus · Accepted Answer

Increasing taxes and cutting government spending can reduce aggregate demand, helping to control inflation.

If the Economy Is Experiencing Inflation, Then the Most Appropriate