Question

If the country was experiencing high inflation, the government {Congress + the President} could _____________________ to help slow down the growth & bring the economy back to it's original level. Question 8 options: A) raise interest rates B) lower interest rates C) increase spending AND decrease taxes D) decrease spending AND increase taxes

Answer 1

D. A decrease in government spending and an increase in taxes is a fiscal policy that the congress and president can enact in an attempt to help slow down the growth & to correct the economy to back to its original level. Furthermore, in able to return the economy to full-employment REAL GDP the government can decrease their spending as a fiscal policy.