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Which action is most likely to result in a decrease in money supply?
A contractionary monetary policy or a contractionary fiscal policy.
Justify the proposed fisical policy actions?
no
The leaders of a small country decide that they need to enact a contractionary fiscal policy Which action is consistent with this fiscal policy?
A reduction in government spending is consistent with a contractionary fiscal policy.
What is contractionary policy?
A contractionary fiscal policy refers to government measures to reduce its expenditure in order to close the inflationary gap. The government reduces the money in supply by effecting tax increases.
Policies reducing levels of economic activity?
contractionary fiscal policy: reducing government expenditure and increasing taxation rate. Contractionary monetary policy: decreasing money supply and increasing interest rates.
What does Contractionary fiscal policy includes?
Contractionary fiscal policy occurs when government spending is lower than tax. Governments can use a budget surplus to do two things. One main instrument of fiscal policy are changes in the levels and composition of tax.
If unemployment is high and the federal government spends more and lowers taxes the government is utilizing what policy?
fisical policy
What is it called when a nation doesn't print enough money?
A contractionary monetary policy
Definition of monetary policies?
Monetary policy is referred to as either being an expansionary policy, or a contractionary policy, where an expansionary policy increases the total supply of money in the economy, and a contractionary policy decreases the total money supply. Expansionary policy is traditionally used to combat unemployment in a recession by lowering interest rates, while contractionary policy involves raising interest rates in order to combat inflation. Monetary policy should be contrasted with fiscal policy, which refers to government borrowing, spending and taxation. More useful Information here: www.vinayakjobs.com .
An example of contractionary fiscal policy would be?
A decrease in government spending and increase in taxes
What type of policy is the government undertaking when they raise taxes and.or reduce federal expenditures?
The government is undertaking a contractionary policy.
Which type of policy would the federal reserve use if the economy were entering a contractionary phase of the business cycle?
Loose monetary policy
