An increase in the tax rates as a result of a new tax law passed by Congress is an example of ________.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy refers to deliberate changes in government spending and tax rates by the government in order to stabilize the economy. The increase in tax rates as a result of the new tax law passed by Congress is a deliberate action taken by the government to adjust the tax policy, which falls under discretionary fiscal policy. It is not increasing government debt or deficit, neither it is needs-tested taxing change.

An Increase in the Tax Rates as a Result of a New