Why is contractionary fiscal policy often not used by the federal government?(1 point) Responses Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract. Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract. The increased individual and corporate income taxes overheats the economy and increases inflation. 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. The increase in individual and corporate tax rates as well as government spending cause a slow down in the private sector economy. Decreases in federal government revenue and increasing expenses cause large deficits and adds to the national debt, which put a strain on the economy.
(1 point) Contractionary fiscal policy is often not used by the federal government because it can lead to negative economic consequences such as slowing down or contracting the economy, increasing inflation, slowing down the private sector economy, and adding to the national debt. Additionally, increasing taxes and decreasing spending for social programs may not be politically popular and could impact certain interest groups negatively.
