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Which of the following combinations of fiscal and monetary policies would be most effective in reducing inflation?Option D) is correct: Monetary policy: sell government securities; Fiscal policy: decrease the federal budget deficit. In an inflationary situation, the money supply should be reduced, and the government should reduce its expenditure and increase taxes.
Which combinations of fiscal and monetary policies will correct a severe recession?So, the best combination of the federal policy to curb the severe recession is the open market purchasing of the Fed coupled with a reduction in taxes.
Which fiscal policy would be most appropriate to reduce inflation?To combat inflation, the government could use contractionary fiscal policy. In this case, it might raise taxes and decrease government spending in an attempt reduce the total level of spending. Many economists suggests that monetary policy, enacted by the Federal Reserve, is more effective for reducing inflation.
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Which of the following monetary and fiscal policy mixes will reduce unemployment quizlet?
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