In late 2008, the U.S. government extended unemployment insurance benefits for seven additional weeks, in recognition of the growing unemployment problem. This extension is an example of

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The extension of unemployment insurance benefits is an example of discretionary fiscal policy, which refers to government actions taken to influence the economy by adjusting spending or taxation. In this case, the government chose to extend unemployment benefits to provide assistance to those who were struggling due to the economic downturn. Automatic fiscal policy, on the other hand, refers to predetermined changes in government spending or taxation that occur automatically in response to changes in the economy, such as changes in tax revenue due to a recession. Expansionary monetary policy involves actions by the central bank to increase the money supply and lower interest rates to stimulate economic growth, while supply-side fiscal policy involves policies aimed at increasing the production potential of the economy.

In Late 2008, the U