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kaheart [24]
2 years ago
13

When does the government assume a contractionary fiscal policy position?

Business
1 answer:
Step2247 [10]2 years ago
4 0
The government assume a contractionary fiscal policy when the economy is strong. When the economy is strong, prices increases as a result of fierce competition for resources. In this situation, the government will assume a contractionary fiscal policy by reducing its spending and by increasing tax. This position will normally create a surplus for the government: a surplus is the amount of taxes left over after government spending.
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