Question

The best fiscal policy for a country suffering from high inflation is: contractionary fiscal policy, which includes decreasing taxes or increasing spending. contractionary fiscal policy, which includes increasing taxes or decreasing spending. expansionary fiscal policy, which includes increasing taxes or decreasing spending. expansionary fiscal policy, which includes decreasing taxes or increasing spending.

Answer 1

Answer: contractionary fiscal policy, which includes increasing taxes or decreasing spending

Explanation:

This is the best fiscal policy for a country trying to reduce inflation because it reduces the rate of economic growth in the country.

When an economy grows, things becomes more expensive and to combat that a Contractionary Fiscal Policy could be introduced.

It works by INCREASING taxes to reduce the amount left for consumption and/or also REDUCING government spending.