Countercyclical discretionary fiscal policy calls for
A)surpluses during recessions and deficits during periods of demand-pull inflation.
B)deficits during recessions and surpluses during periods of demand-pull inflation.
C)surpluses during both recessions and periods of demand-pull inflation.
D)deficits during both recessions and periods of demand-pull inflation.

Question

Quizplus · Accepted Answer

Countercyclical discretionary fiscal policy aims to stabilize the economy by increasing government spending or decreasing taxes during recessions (leading to deficits) and decreasing spending or increasing taxes during periods of demand-pull inflation (leading to surpluses).

Countercyclical Discretionary Fiscal Policy Calls for