Asked by Timyia Thomas on Jul 14, 2024
Verified
During inflation,the optimal discretionary fiscal policy would be _____.
A) to decrease taxes
B) to increase government spending
C) to decrease the reserve ratio
D) to increase taxes
E) to decrease the market interest rate
Taxes
Mandatory financial charges or levies imposed by a government on individuals, corporations, or other entities to finance government spending and various public expenditures.
Discretionary Fiscal Policy
Fiscal measures, such as government spending and taxation, actively applied by a government to influence the economy, especially to counteract recession or control inflation.
Inflation
The rate at which the widespread price level of goods and services rises, impairing the purchasing power.
- Recognize how macroeconomic policies, specifically fiscal and monetary, affect the total demand and supply in an economy.
Verified Answer
Learning Objectives
- Recognize how macroeconomic policies, specifically fiscal and monetary, affect the total demand and supply in an economy.
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