If there is high inflation and the federal government spends less and raises taxes the government is utilizing .?

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2026-03-18 14:50

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If the federal government spends less and raises taxes in response to high inflation, it is utilizing contractionary fiscal policy. This approach aims to reduce overall demand in the economy, helping to control inflation by decreasing the money supply and curbing consumer spending. By tightening fiscal measures, the government seeks to stabilize prices and restore economic balance.

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