Contractionary Policies Are Government Stabilization Policies Intended to Decrease

question 48

Multiple Choice

Contractionary policies are government stabilization policies intended to decrease:

• A)population.
• B)unemployment.
• C)average labor productivity.
• D)planned spending.

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Definitions:

Fiscal Policy

Government decisions on taxation and spending to influence the economy, aiming to manipulate demand, inflation, and economic activity.

Monetary Policy

A central bank's management of money supply and interest rates to achieve macroeconomic objectives like controlling inflation, consumption, growth, and liquidity.

Automatic Stabilizers

Strategies and programs intended to stabilize variations in a country's economic activities without direct involvement from government officials or policy makers.

Top Marginal Rate

The highest rate of tax applied to the last and highest portion of income for taxpayers, often affecting those in the highest income brackets.