Question

Match each situation with the method of government intervention used to rectify it. Tiles price floor contractionary fiscal policy price ceiling expansionary fiscal policy Pairs People have too much money, and there is a danger of inflation. arrowBoth The GDP has fallen to an all-time low, and there is low demand for most goods. arrowBoth Few farmers produce cotton because profits are at the equilibrium price. arrowBoth Prices of staple foods have shot up because of shortages after an earthquake.

Answer 1

People have too much money, and there is a danger of inflation.  - CONTRACTION FISCAL POLICY

The GDP has fallen to an all-time low, and there is low demand for most goods. - EXPANSION FISCAL POLICY

Few farmers produce cotton because profits are at the equilibrium price. - PRICE FLOOR

Prices of staple foods have shot up because of shortages after an earthquake. - PRICE CEILING