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Contractionary policies are _____.

Updated: 4/28/2022
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MeGustaCulo

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fiscal policies, like lower spending and higher taxes, that reduce economic growth

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MeGustaCulo

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Q: Contractionary policies are _____.
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Contractionary policies are?

fiscal policies, like lower spending and higher taxes, that reduce economic growth


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.


Which type of policy is controlled by the Board of Governors of the Federal Reserve?

Well, if by "the federal reserve", you mean the federal reserve bank, then there are two types of policies. These are expansionary and contractionary monetary policies. In times of recession, The FED uses expansionary policies such as increasing the money supply by buying bonds, lowering the discount rate, and lowering reserve requirements.In times of over expansion, The FED uses contractionary policies such as decreasing the money supply by selling bonds, raising the discount rate, and raising reserve requirements.


Which action is most likely to result in a decrease in money supply?

A contractionary monetary policy or a contractionary fiscal 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 .


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.


How do you eliminate the contractionary gap?

The government can lower taxes or interest rates.


Governmental fiscal policy?

Governments do not influence fiscal policies, only monetary policy - Expansionary fiscal policy, where money is injected into the economy to create activity. - Contractionary fiscal policy, where money is withheld from the economy in the hope to control or even reduce inflation.


What is it called when a nation doesn't print enough money?

A contractionary monetary policy


Who argued that the economy should be left to itself to close a contractionary gap?

the classical economists


An example of contractionary fiscal policy would be?

A decrease in government spending and increase in taxes