Which of the Following Is Considered Contractionary Fiscal Policy

question 279

Multiple Choice

Which of the following is considered contractionary fiscal policy?

• A)Congress increases the income tax rate.
• B)Congress increases defense spending.
• C)Legislation removes a college tuition deduction from federal income taxes.
• D)The New Jersey legislature cuts highway spending to balance its budget.

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Definitions:

Price Increase

An upward adjustment in the selling price of goods or services, often due to factors like increased production costs or higher demand.

Quantity Demanded

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

Price Falls

A decrease in the market price of goods or services, often due to increased supply, decreased demand, or external market factors.

Conditions

Refers to the various circumstances or parameters that affect economic models, decision-making processes, or market states.