Vulcan Materials stock price soared in the days following the election of President Trump.Vulcan's products,such as asphalt and concrete,are used in construction and President Trump had pledged to bring about increased spending on infrastructure projects that would require such products.Spending on infrastructure projects 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

Discretionary fiscal policy refers to the deliberate use of government spending and taxation to influence the economy. President Trump's pledge to increase spending on infrastructure projects would be an example of discretionary fiscal policy aimed at increasing real GDP (economic output) and employment. As a result, companies such as Vulcan Materials, which provide products used in these projects, could see an increase in stock price. Therefore, Option A is the best choice. Option B (automatic stabilizer) refers to existing government policies that help stabilize the economy during periods of economic slowdown or recession, but it does not apply in this case. Options C (contractionary fiscal policy) and D (transfer payment) do not fit the situation described in the question.

Vulcan Materials Stock Price Soared in the Days Following the Election