Question 27 1 point d Suggest a fiscal policy that will fix

Question 27 (1 point) d Suggest a fiscal policy that will fix an inflationary gap. 1) The Fed can buy bonds. 2) The Fed can sell bonds. 3) Congress can increase G 4) Congress can increase taxes. Save

Solution

Fiscal policy can be defined as governments actions to influence an economy through the use of taxation and spending. This type of policy is used when policy-makers believe the economy needs outside help in order to adjust to a desired point. Typically a government has a desire to maintain steady prices, an employment level, and a growing economy. If any of these areas are out of sorts, some type of fiscal policy may be in order.

Ans:Congress can increase taxes