Which of the following is an example of discretionary fiscal policy?
A)an increase in unemployment insurance payments during a recession
B)an increase in income tax receipts with rising income during an expansion
C)the tax cuts passed by Congress in 2001 to combat the recession
D)a decrease in food stamps issued during an expansion or boom

Question

Quizplus · Accepted Answer

Discretionary fiscal policy refers to deliberate changes made to government spending and taxation policies to influence economic conditions. The tax cuts passed by Congress in 2001 to combat the recession are an example of discretionary fiscal policy. Option A refers to automatic stabilizers, while option B and D are not examples of discretionary fiscal policy.

Which of the Following Is an Example of Discretionary Fiscal