Asked by Michelle Kotey on Jul 15, 2024
Verified
Each of the following could be used to fight inflation,except
A) decreasing government spending.
B) raising taxes.
C) budget surpluses.
D) budget deficits.
Budget Surpluses
Occurs when a government, company, or individual receives more income than it spends over a specified period, leading to excess funds.
Government Spending
The total amount of money spent by the government on various services, including healthcare, education, and defense.
- Identify the challenges posed by inflationary recessions and strategies to combat them.
Verified Answer
JM
Janee MitchellJul 19, 2024
Final Answer :
D
Explanation :
Budget deficits can actually contribute to inflation, as they increase government spending and can lead to an increase in the money supply. Decreasing government spending, raising taxes, and running budget surpluses are more effective ways to fight inflation as they reduce the amount of money in circulation and decrease aggregate demand.
Learning Objectives
- Identify the challenges posed by inflationary recessions and strategies to combat them.
Related questions
Statement I: Fighting Inflationary Recessions Poses a Dilemma to Macropolicy-Makers ...
One Policy Dilemma Is That Budget Deficits Necessitate Massive Borrowing ...
________ Recessions Pose Major Macropolicy Dilemmas
Inflationary Recessions ...
When There Is a Deflationary Gap _______ GDP Is Greater ...