When would a Contractionary fiscal policy most likely be used? Which of the following best describes the Clinton-Greenspan policy mix? It's done to prevent inflation. Which of the following is an example of a fiscal policy? Unformatted text preview: 11.1 Fiscal policy Part 1: Contractionary Fiscal Policy - Study the chart1 below and answer the questions that follow.1. A contractionary fiscal policy is shown as a: leftward shift in the economy’s aggregate demand curve. The long-term impact of inflation can be more damaging to the standard of living than a … answer choices ... What best describes a recessionary gap? C. The government will … The second type of fiscal policy is contractionary fiscal policy, which is rarely used. Which of these describes a contractionary fiscal policy position? Contractionary Fiscal Versus Monetary Policy . A . The government will maintain spending and taxes at their current rate. A. [1 mark] 1 7 . Which would be the least appropriate action for an Expansionary fiscal policy? Which of the following describes what the Reserve Bank of Australia would do to pursue an contractionary monetary policy? The objective of fiscal policy is to maintain the condition of full employment, economic stability and to stabilize the rate of growth. Macroeconomics Fiscal Systems DRAFT. answer choices B . a. expansionary monetary, contractionary fiscal b. expansionary monetary, expansionary fiscal c. contractionary monetary, contractionary fiscal d. contractionary monetary, expansionary fiscal The government will spend less money than it earns by cutting its spending or by raising taxes. Which of the following represents the most contractionary fiscal policy? The long-term impact of inflation can damage the standard of living as much as a recession. 12th grade. Which one of the following best describes the action of the accelerator theory of investment? Social Studies. Contractionary Fiscal Policy . 21 times. Use open market operations to sell bonds and securities Use open … Firms decide to invest more following a cut in bank rate . Use open market operations to buy bonds and securities. An expansionary fiscal policy is shown as a: rightward shift in the economy’s aggregate demand curve. Which of the following best describes a policy which moves the economy to the right and downward along a given short-run Phillips Curve? A $30 billion decrease in government spending. The tools of contractionary fiscal policy are used in reverse. Which of the following statements best describes the concept of an automatic stabilizer? Select the correct answer below: O action that increases the level of aggregate demand, either through increases in government spending or cuts in taxes O action that decreases the level of aggregate demand, either through cuts in government spending or increases in … b) Preventing unions from going on strike. For […] Contractionary monetary policy occurs when a nation's central bank raises interest rates and decreases the money supply. ... show the use of a contractionary fiscal policy. The diagram below shows the annual rate of inflation in the UK between a) Raising taxes in order to cover a budget deficit. answer choices It is nondiscretionary fiscal policy that mitigates business cycles by increasing aggregate demand during recessions and decreasing aggregate demand during expansions. Its goal is to slow economic growth and stamp out inflation. FEEDBACK Content attribution QUESTION 12.1 POINT Which of the following best describes contractionary fiscal policy? B. ADVERTISEMENTS: Fiscal policy must be designed to be performed in two ways-by expanding investment in public and private enterprises and by diverting resources from socially less desirable to more desirable investment channels. 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