QuestionAugust 16, 2025

Drag Arrange the steps to show the effects of contractionary fiscal policy. Inflationary pressure decreases. Government increases the tax rate. Producers manufacture fewer goods. Consumers have less money to spend. square square 1 square square

Drag Arrange the steps to show the effects of contractionary fiscal policy. Inflationary pressure decreases. Government increases the tax rate. Producers manufacture fewer goods. Consumers have less money to spend. square square 1 square square
Drag Arrange the steps to show the effects of contractionary fiscal policy. Inflationary pressure decreases. Government increases the tax rate. Producers manufacture fewer goods. Consumers have less money to spend. square square 1 square square

Solution
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Answer

1. Government increases the tax rate ### 2. Consumers have less money to spend ### 3. Producers manufacture fewer goods ### 4. Inflationary pressure decreases Explanation 1. Government increases the tax rate The government raises taxes to reduce disposable income. 2. Consumers have less money to spend Higher taxes lead to reduced consumer spending. 3. Producers manufacture fewer goods Reduced demand causes producers to decrease production. 4. Inflationary pressure decreases Lower demand and production reduce inflationary pressures.

Explanation

1. Government increases the tax rate<br /> The government raises taxes to reduce disposable income.<br />2. Consumers have less money to spend<br /> Higher taxes lead to reduced consumer spending.<br />3. Producers manufacture fewer goods<br /> Reduced demand causes producers to decrease production.<br />4. Inflationary pressure decreases<br /> Lower demand and production reduce inflationary pressures.
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