7
QuizMultiple Choice

Government and the Economy

Question 7 • FL-2106010-M/J Civics B

Contractionary fiscal policy is used to __________.

Answer
A
increase the amount of money in the economy
B
decrease the amount of money in the economy
C
decrease the money in the economy, then increase it
D
increase the money in the economy, then decrease it

Explanation

Contractionary fiscal policy is intended to slow economic activity by reducing aggregate demand, often through lower government spending or higher taxes. These measures reduce the flow of spending in the economy, so the best choice is “decrease the amount of money in the economy.”

AI-written and checked against the verified answer.

Previous
Next