Which strategy would Congress likely use to slow down economic growth?

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Prepare for the Personal Finance Module 3 DBA Test. Access flashcards and multiple choice questions, each enhanced with hints and detailed explanations. Ensure you're ready for your assessment!

The strategy that Congress would likely use to slow down economic growth is increasing taxes. When taxes are raised, individuals and businesses have less disposable income to spend and invest, which can lead to a decrease in overall demand for goods and services. This reduction in demand can help to cool an overheating economy that may be experiencing high inflation or unsustainable growth rates.

Higher taxes can also discourage spending and investment, as people may prioritize saving money due to the increased burden on their current finances. This disincentive affects consumption patterns, which can lead to slower economic growth as businesses respond to decreased consumer spending. Additionally, higher taxes can impact corporate profits, possibly leading to reduced investment in expansion or hiring, further contributing to a slowdown in economic activity.

In contrast, the other strategies mentioned, such as increasing government employment, decreasing taxes, or boosting public spending, are generally aimed at stimulating economic activity, thus likely leading to increased growth rather than a slowdown.

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