drag the tiles to the correct boxes to complete the pairs. match each situation with the method of…
drag the tiles to the correct boxes to complete the pairs. match each situation with the method of government intervention used to rectify it. price floor contractionary fiscal policy price ceiling expansionary fiscal policy people have too much money, and there is a danger of inflation. the gdp has fallen to an all - time low, and there is low demand for most goods. few farmers produce cotton because profits are at the equilibrium price. prices of staple foods have shot up because of shortages after an earthquake.
Answer
Answer:
- People have too much money, and there is a danger of inflation. → contractionary fiscal policy
- The GDP has fallen to an all - time low, and there is low demand for most goods. → expansionary fiscal policy
- Few farmers produce cotton because profits are at the equilibrium price. → price floor
- Prices of staple foods have shot up because of shortages after an earthquake. → price ceiling
Brief Explanations:
- Contractionary fiscal policy reduces the money supply to control inflation when there is excess money.
- Expansionary fiscal policy stimulates the economy by increasing government spending or cutting taxes when GDP is low and demand is weak.
- A price floor is set above the equilibrium price to encourage producers, like farmers in the case of cotton.
- A price ceiling is set to limit price increases, useful when staple food prices rise due to shortages.