Question

If the government increases taxes in response to an inflation, the government is engaging in what economists call?

Answer 1

Fiscal Policy

Step-by-step explanation:

Fiscal Policy

Fiscal Policy is a policy through which government maintained its spending and its tax rate to regulate the nation's economy. It is same as monetary policy through which central bank of state regulate their money supply. Tax cuts and government increased are examples of fiscal policy.

Type of fiscal policy are

1) neutral policy

2) expansionary policy

3) contractionary policy

Answer 2

fiscal policy

Step-by-step explanation:

Fiscal policy is the policy which is used by the government the tax rate and government spending economy to analyse the economy of the nation

It is a technique through which a national bank impacts a country's cash supply.

The instances of fiscal policy are tax reductions and expanded government spending. Both of these strategies are proposed to build total interest while adding to shortages or drawing down of spending plan surpluses.