Answered

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Which statement explains why contractionary fiscal policy is often not used by the federal government?(100 points)


Decreases in federal government revenue and increasing expenses cause large deficits and adds to the national debt, which put a strain on the economy.


The increased individual and corporate income taxes overheats the economy and increases inflation.



The increase in individual and corporate tax rates as well as government spending cause a slow down in the private sector economy.

Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract.

Sagot :

Answer:

Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract.

Explanation:

Parrain

The government often avoids contractionary fiscal policy because Individual and corporate tax rates increase while spending for social programs decrease,...economy to slow down or contract.

Why does the government avoid contractionary fiscal policy?

Contractionary fiscal policy involves the government reducing spending while increasing taxes.

As a result, individual and corporate tax rates will increase while the government will spend less on social programs. Both of these would cause the economy to contract.

Find out more on contractionary fiscal policy at https://brainly.com/question/1416825.

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