To Combat Inflation,Congress and the President Should

question 175

Multiple Choice

To combat inflation,Congress and the president should

• A)decrease government spending.
• B)decrease taxes.
• C)raise interest rates.
• D)increase transfer payments.

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Definitions:

Command Economy

An economic system where the government controls the major aspects of production, distribution, and exchange of goods and services.

Central Planning

An economic system where all major production, investment, and distribution decisions are made by a central authority, typically the government.

Free Enterprise

An economic system in which private businesses operate in competition and largely free of state control, with minimal government intervention.

Price Mechanism

The method through which changes in supply and demand cause prices to increase or decrease, directing how resources are distributed in a market-based economy.