Question

If the government’s fiscal policy involves stopping high inflation, which choices should Congress consider? :

A) Either raise the discount rate or buy bonds
B) Either lower the discount rate or sell bonds
C) Either increase taxes or cut government spending
D) Either cut taxes or increase government spending

Answer 1

I think the correct answer from the choices listed above is option C. If the government’s fiscal policy involves stopping high inflation, then the government would either increase taxes or cut government spending. Hope this answers the question. Have a nice day.