What actions should be taken under the internal-external imbalance of inflation and surplus?

Question

Quizplus · Accepted Answer

With internal-external imbalance of inflation and surplus, contractionary fiscal policy (such as reducing government spending and/or increasing taxes) can help to combat the inflationary pressures, while expansionary monetary policy (such as lowering interest rates, increasing money supply) can help alleviate the effects of the surplus. Therefore, option C is the most suitable solution.

What Actions Should Be Taken Under the Internal-External Imbalance of Inflation