The economy is in a recession and the recessionary gap is large.Discretionary fiscal policy that might occur is _______.Automatic fiscal policy that might occur is _______.
A) a decrease in transfer payments and an increase in taxes with no interference by Parliament; a decrease in government expenditure and an increase in taxes by a decision of Parliament
B) an increase in government expenditure and a cut in taxes by a decision of Parliament; an increase in transfer payments and a fall in taxes
C) an increase in transfer payments and a fall in taxes with no interference by Parliament; an increase in government expenditure and a cut in taxes by a decision of Parliament
D) a decrease in government expenditure and an increase in taxes by a decision of Parliament; a decrease in transfer payments and an increase in taxes with no interference by Parliament
E) a decrease in the interest rate; an increase in the quantity of money
Correct Answer:
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