During inflation,the optimal discretionary fiscal policy would be _____.

A) to decrease taxes
B) to increase government spending
C) to decrease the reserve ratio
D) to increase taxes
E) to decrease the market interest rate

Taxes

Mandatory financial charges or levies imposed by a government on individuals, corporations, or other entities to finance government spending and various public expenditures.

Discretionary Fiscal Policy

Fiscal measures, such as government spending and taxation, actively applied by a government to influence the economy, especially to counteract recession or control inflation.

Inflation

The rate at which the widespread price level of goods and services rises, impairing the purchasing power.