Question

The nation is currently experiencing a period of rising prices. Inflation is making consumer goods increasingly difficult to afford as wages have remained constant. As a member of Congress, what changes would you suggest to fiscal policy to balance the budget and indirectly address inflation? Suggest at least two specific changes to revenue and expenditures.

Answer 1

Answer:

Inflation in a country makes its citizen difficult to survive. The cost of every commodity increases that are essential for the people.

Explanation:

Inflation occur when the economy of a country grows due to the increased spending and expenditure. As a result the price of every item and goods increases and the value of currency decreases.

Some of the methods to fight inflation are :

-- the government can increase the interest rates on the borrowings and decrease the bond prices, This reduces the supply of money in the market.

-- the government can decrease the expenditure made by the government or by reducing the private spending such increasing the tax paid by the people.