If government decided to increase taxes or decrease its spending, most likely this was to correct:
A) a recession.
B) inflation.
C) high unemployment.
D) equilibrium.
Answer Key

Question

Quizplus · Accepted Answer

When the government decides to increase taxes or decrease spending, it is most likely to be done to address inflation. This is because increasing taxes reduces the disposable income available for spending, which slows down economic growth and causes a decrease in demand for goods and services. Similarly, decreasing government spending reduces the money supply in the economy, which also has a downward pressure on inflation.

If Government Decided to Increase Taxes or Decrease Its Spending