Why would the government ever engage in contractionary fiscal policy?

The government would ever engage in contractionary fiscal policy in order to reduce inflation.

Explanation:

Contractionary fiscal policy refers to a type of fiscal policy in which there is either a reduction in government expenditure, an increase in taxes, or both in order to ensure the amount of money that businesses and consumers have to spend are reduced.

The goal of engaging in contractionary fiscal policy is to reduce inflation.

Inflation occurs when there is a persistent rise in the general price level and too much money are chasing fewer goods in an economy.

When the government engage in a contractionary fiscal policy, government will reduce its spending and/or increase taxes and inflation will fall.

Therefore, the government would ever engage in contractionary fiscal policy in order to reduce inflation.

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