The Set of Fiscal Policies That Would Be Most Contractionary

question 76

Multiple Choice

The set of fiscal policies that would be most contractionary would be a(n)

• A)increase in government spending and taxes.
• B)decrease in government spending and taxes.
• C)increase in government spending and a decrease in taxes.
• D)decrease in government spending and an increase in taxes.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level.

Insurance Exchanges

Marketplaces established to facilitate the purchase and sale of insurance plans, allowing consumers to compare and choose from various health insurance options.

Foster Competition

To encourage or promote a market environment where businesses compete freely with one another, aiming to improve efficiency and innovation.

Income Increase

A rise in the amount of earnings received over a given period of time, whether from wages, investments, or other sources.