Conducting fiscal policy so that G = T, where G is government expenditures and T is tax revenue, is an example of a(n):
A) active rule.
B) passive rule.
C) discretionary policy.
D) automatic stabilizer.

Question

Quizplus · Accepted Answer

Conducting fiscal policy so that G = T, where G is government expenditures and T is tax revenue, is an example of a passive rule, because it does not require any discretionary action by policymakers. A passive rule is a policy that is automatically triggered by changes in the economy, whereas discretionary policies require active intervention by policymakers.

Conducting Fiscal Policy So That G = T, Where G