Question

The country of Lilliput has low unemployment and high consumer spending, and small businesses are thriving. However, prices are starting to rise throughout the economy. What should Lilliput's government do to prevent inflation from happening?.

Answer 1

Lilliput is experiencing high economic activities which reflects on the low unemployment rate and high consumer spending of the state. To prevent inflation, they should raise the income tax, which gives citizens less money to spend, and buy more services from civilian-owned businesses, which creates more jobs.

Answer 2

The country Lilliput has low unemployment and high consumer spending, and small businesses are thriving. However, prices are starting to rise throughout the economy. The government of Lilliput should raise the income tax, which gives citizens less money to spend, and buy more services from civilian - owned businesses, which creates more jobs.