When inflation begins to climb to unacceptable levels in the economy, the government should

Question 7 1 pts When inflation begins to climb to unacceptable levels in the economy, the government should use contractionary fiscal policy to shift aggregate demand to the left. use expansionary fiscal policy to shift aggregate demand to the left. use contractionary fiscal policy to shift aggregate demand to the right. use expansionary fiscal policy to shift aggregate demand to the right.

When inflation begins to climb to an acceptable levels in theeconomy the government should use contractionary fiscal policy toshift aggregate demand to the left. When the government usescontractionary fiscal policy it has the two options, whether todecrease the government expenditure on the goods and services or toincrease the tax rate in the economy which reduces the spendinglevel in the economy and thereby shift the aggregate demand curveto the left. So,the right answer is use contractionary fiscal policy to shift

aggregate demand to the left.

Question 13 out of 3 pointsWhen inflation begins to climb to unacceptable levels in the economy, thegovernment should:SelectedAnswer:use contractionary fiscal policy to shift aggregate demandto the right.Answers:use contractionary fiscal policy to shift aggregate demandto the right.use contractionary fiscal policy to shift aggregate demandto the left.use expansionary fiscal policy to shift aggregate demandto the right.use expansionary fiscal policy to shift aggregate demandto the left.

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