select the correct answer. under which type of policy does the government reduce its expenditures and…

select the correct answer. under which type of policy does the government reduce its expenditures and increase tax rates? a. contractionary monetary policy b. contractionary fiscal policy c. expansionary fiscal policy d. expansionary monetary policy

select the correct answer. under which type of policy does the government reduce its expenditures and increase tax rates? a. contractionary monetary policy b. contractionary fiscal policy c. expansionary fiscal policy d. expansionary monetary policy

Answer

Brief Explanations:

Fiscal policy involves government spending and taxation. Contractionary fiscal policy aims to reduce aggregate demand by decreasing government expenditures and increasing tax rates. Monetary policy deals with money supply and interest - rates, not government spending and taxes directly.

Answer:

B. contractionary fiscal policy