select the correct answer.\nthe economic inflation rate is steadily growing. the government thinks it is…

select the correct answer.\nthe economic inflation rate is steadily growing. the government thinks it is because of excess money in the economy. it decides to implement a contractionary fiscal policy to control inflation. what action might the government take as part of its contractionary fiscal policy?\na. increase government spending\nb. decrease the tax rate\nc. increase the tax rate\nd. stop minting money

select the correct answer.\nthe economic inflation rate is steadily growing. the government thinks it is because of excess money in the economy. it decides to implement a contractionary fiscal policy to control inflation. what action might the government take as part of its contractionary fiscal policy?\na. increase government spending\nb. decrease the tax rate\nc. increase the tax rate\nd. stop minting money

Answer

Brief Explanations:

Contractionary fiscal policy aims to reduce the money - supply in the economy. Increasing government spending and decreasing tax rates are expansionary fiscal policies. Stopping minting money is a monetary policy action. Increasing the tax rate reduces the disposable income of individuals and businesses, thus reducing the money in circulation, which is a contractionary fiscal policy measure.

Answer:

C. increase the tax rate