Fiscal policy that the government chooses to adopt is called:
A) an automatic stabilizer.
B) discretionary fiscal policy.
C) monetary policy.
D) contractionary policy.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy is the deliberate use of government spending, taxation, or transfer payments to alter economic outcomes. Automatic stabilizers (A) refer to changes in government spending or taxation that occur automatically without any additional policy action. Monetary policy (C) refers to the actions taken by a central bank to manage the money supply and interest rates. Contractionary policy (D) refers to a policy designed to reduce aggregate demand and slow down economic activity.

Fiscal Policy That the Government Chooses to Adopt Is Called