The federal government uses government spending and tax rates to help control recessions and encourage economic activity. This is called

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Clops · Answer 1 · 2017-05-09T04:40:42+0000

Contractionary fiscal policy is a form of fiscal policy that involves increasing taxes, decreasing government expenditures or both in order to fight inflationary pressures. Due to an increase in taxes, households have less disposal income to spend. Lower disposal income decreases consumption.

The federal government uses government spending and tax rates to help control recessions and encourage economic activity. This is called

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