Part of the spending on the Caldecott Tunnel project in northern California came from the American Reinvestment and Recovery Act,which is an example of ________ aimed at increasing real GDP and employment.
A)discretionary fiscal policy
B)an automatic stabilizer
C)contractionary fiscal policy
D)a transfer payment

Question

Quizplus · Accepted Answer

The American Reinvestment and Recovery Act is an example of discretionary fiscal policy, as it involved deliberate government spending aimed at boosting economic growth and employment. Discretionary fiscal policy refers to deliberate changes in government spending or taxation aimed at achieving macroeconomic goals such as increasing real GDP and reducing unemployment. The Caldecott Tunnel project is an example of such spending. Automatic stabilizers refer to existing features of the tax and transfer system that automatically adjust to changes in economic conditions, without the need for deliberate policy actions. Contractionary fiscal policy refers to a deliberate decrease in government spending or an increase in taxation aimed at reducing inflationary pressures. Transfer payments refer to government payments made to individuals or households for social welfare purposes, such as Social Security or unemployment benefits. None of these apply in this case.

Part of the Spending on the Caldecott Tunnel Project in Northern