Question

Arrange the steps to show the effects of contractionary fiscal policy.
-inflationary pressure decreases
-government increases tax rate
-producers manufacture fewer goods
-consumers have less money to spend
(Arrange in order)

Answer 1

The correct arrangement for the steps to show the effects of contractionary fiscal policy would be as follows:

-government increases tax rate
-inflationary pressure decreases
-consumers have less money to spend
-producers manufacture fewer goods

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Answer 2

This is the correct answer:

Government increases the tax rate.

Consumers have less money to spend.

Producers manufacture fewer goods.

Inflationary pressure decreases.

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