Concept:Restrictive fiscal policy is a government measure used to reduce inflation by cutting spending and increasing taxes.
Explanation:To control inflation, the government can reduce its expenditure.
This lowers the total money supply circulating in the economy.
With less money available, aggregate demand falls.
A fall in demand helps reduce the general price level.
This policy is known as a restrictive or contractionary fiscal policy.
A budget deficit would increase spending, not reduce inflation.
Expansionary monetary policy is for stimulating growth, not curbing inflation.
Physical policy is not a standard economic tool for inflation control.
Answer:D. a restrictive fiscal policy