Which of the following is a potential drawback of contractionary fiscal policy? a. Increased unemployment b. Controlled inflation c. Reduced government debt d. Decreased economic growth
Added by Eugenia M.
Step 1
Step 1: Contractionary fiscal policy involves reducing government spending and/or increasing taxes to slow down economic growth and control inflation. Show more…
Show all steps
Your feedback will help us improve your experience
Lottie Adams and 61 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Which of the following would be true of policies taken during times of BOTH high and low unemployment? The multiplier effect will magnify the influence of policies. Increasing government spending will stimulate the economy. Cutting taxes will cause an increase in GDP. Reducing the money supply will reduce inflation.
Lottie A.
Which of the following is an example of expansionary fiscal policy? a) increasing taxes b) increasing government spending c) decreasing government transfers d) decreasing interest rates e) increasing the money supply
Haricharan G.
During periods of hyperinflation, which of the following would be a contractionary measure taken? A. controlling inflation rates B. ignoring the unemployment rate C. controlling all taxation D. controlling production and distribution
Chandra J.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD