What set of economic policies aims to reduce government budget deficits through spending cuts, tax increases, or both?
Show answer
Austerity
Austerity measures are typically implemented when a government's debt becomes so high that it risks defaulting. While these policies aim to restore fiscal health, they are often controversial because they can lead to reduced public services and slower economic growth.
Also asked as:
- What term is used for economic policies that use spending cuts or tax increases to lower budget deficits?