Contractionary fiscal policy is used to
a.
increase the amount of money in the economy
b.
decrease the amount of money in the economy
c.
decrease the money in the economy, then increase it
d.
increase the money in the economy, then decrease it

The correct answer is B. Contractionary fiscal policy is used to decrease the amount of money in the economy.

Explanation:

The contractive fiscal policy is a type of fiscal policy in which there is room for reducing public spending and increasing tax revenue through tax revenues of citizens. That is, it is the opposite option to expansive fiscal policy.

Through contractionary fiscal policies, states obtain higher collections in terms of taxes compared to public spending, so it is said that the budget deficit decreases. On the other hand, the reduction of expenditure and the increase of taxes can be measures that are taken together or not. Generally the contractive policy is usually generated by a combination of both.

The contractive fiscal policy is used in periods of time in which it is sought to stop the growth of aggregate demand, for example in times of economic boom as a way of controlling inflation.  For this, it seeks to reduce business investment or consumption through the rise in taxes that make citizens have less money in their pockets.

b

Explanation:

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explanation: