Federal policy changes that uses automatically changes taxes and/or government spending to help stabilize the economy are known as

Question

Quizplus · Accepted Answer

The given description matches with nondiscretionary fiscal policy. This policy is also known as automatic stabilizers because it automatically changes taxes and government spending in response to economic conditions without requiring new legislation or administrative action. Therefore, option B is the correct answer.

A) Discretionary fiscal policy refers to changes in government spending and taxation that are the result of deliberate changes in policy by the government.

C) Expansionary fiscal policy refers to an increase in government spending and/or a decrease in taxes to boost economic growth.

D) Contractionary fiscal policy refers to a decrease in government spending and/or an increase in taxes to slow down economic growth.

Federal Policy Changes That Uses Automatically Changes Taxes And/or Government