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Solved: Which of the following is a fiscal policy that is appropriate to combat
Chapter 0, Problem 4(choose chapter or problem)
QUESTION:
Which of the following is a fiscal policy that is appropriate to combat inflation? a. decreasing taxes b. decreasing government spending c. increasing government transfers d. increasing interest rates e. expansionary fiscal policy
Questions & Answers
QUESTION:
Which of the following is a fiscal policy that is appropriate to combat inflation? a. decreasing taxes b. decreasing government spending c. increasing government transfers d. increasing interest rates e. expansionary fiscal policy
ANSWER:Step 1 of 6
During inflation, the price level is high, and the consumer's purchasing power falls with the income. Thus, inflation hurts the consumers.