Question

Contractionary fiscal policy

Answer 1

When the government either cuts its spending or raises taxes.

Hope this helps! Have a great day :)

Answer 2

The policy of reducing the amount of money, on the Economy of one country by cutting Government investments or raising taxes.

Explanation:

Generally vey known to population when there are economical problems in a nation.

In other words, the Government has a decreasing income. But its expenses increase. The way out is to contract the economy by reducing the amount of money, cutting investments or worse raising taxes.

This slows down the economic growth, increase the inflation and may lead to recession. But it may lead to a fiscal balance