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Tax revenues to reduce rate of inflation

Explain how government might manipulate its expenditures and tax revenues to reduce rate of inflation?

E

Expert

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To reduce the rate of inflation, government should reduce aggregate spending for goods and services in the economy. It can do so by decreasing its own spending and/or by increasing taxes, which would induce consumers to spend less.  It could also encourage the monetary authorities to reduce the supply of money and credit.

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