Answer to Question #135441 in Macroeconomics for James

Question

In the event high levels of inflation,the government can:(2)
(a) Implement a restrictive fiscal policy by raising interest rates;
(b) Implementarestrictivefiscalpolicybydecreasinginterestrates;
(c) Implement a restrictive fiscal policy by raising tax rates and decreasing government
expenditure;
(d) Implement a restrictive fiscal policy by decreasing tax rates and increasing interest
rates.

Answer 1

C) Implement a restrictive fiscal policy by raising tax rates and decreasing government

expenditure;