Which of the following are both policies that are consistent with trying to stabilize output when prices and output rise?
A) decrease the money supply and decrease taxes
B) increase the money supply and decrease taxes
C) decrease the money supply and increase taxes
D) increase the money supply and increase taxes

Question

Quizplus · Accepted Answer

To stabilize output when prices and output rise, a government or central bank might decrease the money supply to combat inflation and increase taxes to reduce consumer spending, both of which can help cool down an overheating economy.

Which of the Following Are Both Policies That Are Consistent