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Fantom [35]
3 years ago
5

Drag each tile to the correct box. Arrange for the steps to show the effects of contractionary fiscal policy.

Social Studies
2 answers:
kupik [55]3 years ago
8 0

d i had it on usa test prep

Illusion [34]3 years ago
6 0

<u>The correct order for the steps that show how contractionary fiscal policies work would be the following</u>:

-Government increases tax rate  

-Inflationary pressure decreases  

-Consumers have less money to spend  

-Producers manufacture fewer goods

Contractionary monetary policy is often applied <u>when the economy is suffering from inflationary pressure</u>. The central bank (U.S. Federal Reserve) will <u>slow down the monetary supply</u>. In turn, this raises the cost of borrowed money, which <u>decreases Gross Domestic Product and inflation</u>. Some negative side effects could be a higher unemployment rate.


Hope this helps!


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