Question

Drag each tile to the correct box. Arrange for the steps to show the effects of contractionary fiscal policy.

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Answer choices
A) inflationary pressure decreases
B) Goverment increases the tax rate
C) producers manufacturer fewer goods
D) consumers have less money to spend

Answer 1

d i had it on usa test prep

Answer 2

The correct order for the steps that show how contractionary fiscal policies work would be the following:

-Government increases tax rate

-Inflationary pressure decreases

-Consumers have less money to spend

-Producers manufacture fewer goods

Contractionary monetary policy is often applied when the economy is suffering from inflationary pressure. The central bank (U.S. Federal Reserve) will slow down the monetary supply. In turn, this raises the cost of borrowed money, which decreases Gross Domestic Product and inflation. Some negative side effects could be a higher unemployment rate.

Hope this helps!