Question

The leaders of a small country decide that they need to enact a contractionary fiscal policy. Which action is consistent with this fiscal policy?

Answer 1

The correct answer for this question is this one: "A reduction in government spending is consistent with a contractionary fiscal policy." The leaders of a small country decide that they need to enact a contractionary fiscal policy. The action that is consistent with this fiscal policy is that a reduction in government spending is consistent with a contractionary fiscal policy.