Question

when the government increases its spending and/or decreases tax rates, it can _____. this may conflict with the federal reserve's goal of _____. lower inflation, shrinking the economy shrink the economy, raising prices encourage economic growth, lowering inflation

Answer 1

When the government increases its spending and/or decreases tax rates, it can shrink the economy.

This may conflict with the federal reserve's goal of lowering inflation. 

When government decrease tax while increase its spending, it would risk a deficit in the Government's budget.

hope this helps

Answer 2

When the government increases its spending and/or decreases tax rates, it can shrink the economy.  this may conflict with the federal reserve's goal of  encourage economic growth.

As a well-known rule, every time the government increases its spending and/or decreases tax rates we see a negative effect on the economy. Given that the government does not generate wealth or produce anything, it can only finance itself via taxation, money printing, and public debt. Those methods shrink the economy direct or indirectly. The Federal Reserve was created with the purpose of being an autonomous entity to encourage economic growth. Knowing it suppose operate separated from the government, one bad decision from the government can conflict with its main goal.