Which of the following fiscal policy action would cause the economy to contract?

a.

raise taxes

c.

decrease the money supply

b.

increase government expenditures

d.

balance the budget

the fiscal policy action would cause the economy to contract is: A. raise taxes Economic contraction refer to a decline in national output as measured in GDP for that year. When you increase taxes, the company wouldn't be able to afford to buy materials and hire employees. This will lead to a decrease in productivity and caused economic contraction