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When the government decreases spending or increases taxes to slow economic expansion, the government is conducting: a contractionary fiscal policy. b contractionary monetary policy. c expansionary fiscal
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When the government decreases spending or increases taxes to slow economic expansion, the government is conducting: a contractionary fiscal policy. b contractionary monetary policy. c expansionary fiscal policy. d expansionary monetary policy. e neither monetary policy nor fiscal policy.

User Sebastian Brannstrom
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4 votes

Answer:

The correct answer is option a.

Step-by-step explanation:

Fiscal policy can be defined as a tool to make changes in the consumption and aggregate demand through government spending and tax revenue.

A contractionary policy is used to reduce aggregate demand. A reduction in spending by the government or an increase in taxes is are tools for contractionary fiscal policy.

User Midhun K
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