When the economy is expanding too rapidly and inflation and balance of payments problems are being experienced, the appropriate measure to implement is to apply:

Question

expansionary fiscal and monetary policies

restrictive fiscal and monetary policies

expansionary fiscal and restrictive monetary policies

restrictive fiscal and expansionary monetary policies

Answer 1

When the economy is expanding too rapidly and inflation and balance of payments problems are being experienced, the appropriate measure to implement is to apply:

restrictive fiscal and monetary policies.

Restrictive policies aim to slow down the economy by reducing government spending and increasing interest rates, which can help control inflation and stabilize the balance of payments.