Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Reducing government spending
B
Increasing taxes
C
Both A and B
D
Decreasing interest rates
Understanding the Answer
Let's break down why this is correct
Answer
A goal of fiscal policy aimed at controlling inflation is to reduce overall demand in the economy. When people and businesses spend less money, it can help slow down rising prices. For example, if the government decides to cut public spending or increase taxes, people will have less money to spend, which can help lower inflation. This is important because high inflation can make it harder for people to afford basic needs. Therefore, by adjusting spending and taxation, the government can work to keep prices stable and maintain a healthy economy.
Detailed Explanation
Fiscal policy aims to control inflation by reducing spending and increasing taxes. Other options are incorrect because Some might think cutting spending alone is enough to control inflation; People might believe that raising taxes alone will fix inflation.
Key Concepts
Fiscal policy
Topic
Fiscal Policy and Inflation Control
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.