Which policy action would slow economic growth?

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Multiple Choice

Which policy action would slow economic growth?

Explanation:
Policy actions that affect how much the economy spends overall determine how quickly output can grow. Injections add to spending (for example, government spending and investment), while withdrawals remove spending from the economy (like taxes, saving, and imports). Reducing injections and increasing withdrawals lowers aggregate demand, so firms respond by cutting production or hiring less, which slows economic growth. The other options would boost demand—more government spending, lower taxes, or easier borrowing stimulate growth.

Policy actions that affect how much the economy spends overall determine how quickly output can grow. Injections add to spending (for example, government spending and investment), while withdrawals remove spending from the economy (like taxes, saving, and imports). Reducing injections and increasing withdrawals lowers aggregate demand, so firms respond by cutting production or hiring less, which slows economic growth. The other options would boost demand—more government spending, lower taxes, or easier borrowing stimulate growth.

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