Which of the following fiscal tax policies would be used to reduce inflation?(1 point)

Question

Responses

income tax policy
income tax policy

monetary policy
monetary policy

contractionary policy
contractionary policy

expansionary policy

Answer 1

To reduce inflation, the appropriate fiscal policy would be:

Contractionary policy

Contractionary fiscal policy involves decreasing government spending or increasing taxes to reduce the overall demand in the economy, which can help lower inflation.