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Contractionary fiscal policy is used to __________.

A.
increase the amount of money in the economy
B.
decrease the amount of money in the economy
C.
decrease the money in the economy, then increase it
D.
increase the money in the economy, then decrease it

User Cassandre
by
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2 Answers

3 votes

Answer:

b

decrease the amount of money in the economy

Step-by-step explanation:

User Sudip Das
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4 votes

Answer: B. decrease the amount of money in the economy

Step-by-step explanation:

Contractionary fiscal policy is action taken by the government to reduce th amount of money in the economy. It is usually done when the government thinks the economy is producing more than it should be and so therefore inflation is reaching unsustainable levels.

Contractionary policy entails the government reducing its spending and/or increasing taxes so that people have less money to spend on goods and services.

User Ben Whitmore
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