Fiscal Policy and Inflation Control
Analyse how fiscal policy could reduce the inflation rate.
Macroeconomic Factors and Policies
Frequently asked question
- Definition of contractionary/deflationary fiscal policy
II. Reduction in government spending
- Explanation of how it may reduce total demand
- How it can reduce demand-pull inflation
III. Increase in income tax
- Explanation of how it would reduce disposable income
- How it may lower consumer spending
- How it can reduce total demand
- How it can lower demand-pull inflation
IV. Increased spending on education/healthcare
- Explanation of how it may raise productivity
- How it can lower costs
- How it can reduce cost-push inflation
- Summary of the effects of contractionary/deflationary fiscal policy on inflation
- Importance of using such policies to maintain economic stability.
Ops... End of preview!
Already purchased Economics Study Pack subscription? Amazing! Click below