Contractionary fiscal policy is deliberate government action to influence aggregate demand and the level of real GDP through:

Question

Quizplus · Accepted Answer

Contractionary fiscal policy involves decreasing government spending or increasing taxes, both of which reduce aggregate demand in the economy. This policy is used to combat inflationary pressures and to slow down economic growth. Options A and B refer to monetary policy, while option C refers to trade policy.

Contractionary Fiscal Policy Is Deliberate Government Action to Influence Aggregate