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May 29, 2015

Homework Help: Economics

Posted by Amy on Monday, November 6, 2006 at 12:18am.

Which combination of fiscal policy actions would be most contractionary for an economy experiencing severe demand-pull inflation?
a. increase taxes and government spending
b. decrease taxes and government spending
c. increase taxes and decrease governmnet spending
d. decrease taxes and increase government spending

c. Both policy actions would cool (contract) the economy

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