answersLogoWhite

0


Best Answer

Policies that raise taxes tend to contract the economy. In addition, policies that cause the government to do less spending contract the economy.

User Avatar

Wiki User

10y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What fiscal policy action would cause the economy to contract?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

Governmental fiscal policy?

Governments do not influence fiscal policies, only monetary policy - Expansionary fiscal policy, where money is injected into the economy to create activity. - Contractionary fiscal policy, where money is withheld from the economy in the hope to control or even reduce inflation.


Which action would be a change in the government's fiscal policy?

Which action would be a change in the government's fiscal policy


What is the difference between automatic and discretionary fiscal policy?

Discretionary fiscal policy requires deliberate government action. Automatic fiscal policy occurs automatically without (additional) congressional action.


What is the aim of Fiscal policy?

One of the major uses of government fiscal policy is to create stability in the economy. To curb inflation would be another use of fiscal policy.


What is called fiscal policy?

Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy


What is the main goal of both fiscal and monetary policy?

The main goal of both fiscal and monetary policy is to stabilize the economy.


Controlling money to influence the economy is called?

Fiscal policy is the controlling of money to have an overall influence of the economy. Fiscal policy is based on ideas from economist John Maynard Keynes.


The leaders of a small country decide that they need to enact a contractionary fiscal policy Which action is consistent with this fiscal policy?

A reduction in government spending is consistent with a contractionary fiscal policy.


How does the government fiscal policy affect the economy?

When inflation increase


What is the definition of structural fiscal policy?

Policy put in operation to strengthen the economy in the long run.


What is the purpose of the government's fiscal policy?

To stabilise a particular countries economy.


Measures that the federal government takes to stabilize the economy are .?

fiscal policy