When an economy is in a recession,discretionary fiscal policy would call for ________,and the automatic stabilizers would ____________.

Question

Quizplus · Accepted Answer

During a recession, discretionary fiscal policy calls for lowering tax rates to encourage spending and stimulate economic growth. However, this results in lower tax revenues. On the other hand, automatic stabilizers like unemployment benefits and progressive income taxes automatically increase government spending and decrease tax revenues during a recession, thereby providing a stabilizing influence on the economy.

When an Economy Is in a Recession,discretionary Fiscal Policy Would