Discretionary fiscal policy is so named because it:
A)is undertaken at the option of the nation's central bank.
B)occurs automatically as the nation's level of GDP changes.
C)involves specific changes in T and G undertaken expressly for stabilization purposes at the option of Parliament.
D)none of the above.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy refers to deliberate changes in government spending (G) and/or taxation (T) that are made to stabilize or impact the economy. These changes are made at the discretion of Parliament or the government, hence the term "discretionary". Option A refers to monetary policy, not fiscal policy, while option B refers to automatic stabilizers rather than discretionary policy. Therefore, the correct answer is C.

Discretionary Fiscal Policy Is So Named Because It