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20 February, 01:09

A decrease in taxes is one way to pursue a contractionary fiscal policy because it will make government revenues contract.

(A) True

(B) False

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Answers (1)
  1. 20 February, 01:12
    0
    Answer: False

    Explanation: The contractionary fiscal policies are implemented by the govt when the economy is facing inflationary pressures. In such policies, govt. focus on decreasing the supply of money in the economy by either increasing taxes, decreasing expenditures or both.

    Hence, we can conclude that the given statement is false.
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