An example of discretionary fiscal policy would be

Question

Quizplus · Accepted Answer

Discretionary fiscal policy refers to deliberate changes in government spending and taxation to influence the economy. A tax cut adopted to stimulate consumption is an example of discretionary fiscal policy as it is a deliberate measure taken by the government to boost economic growth by increasing consumer spending. Option A refers to the ongoing operation of the welfare state, which is not a discretionary policy measure as it is a permanent fixture of government spending. Option B refers to a progressive income tax, which is not discretionary policy as it is a pre-existing tax system. Option D refers to monetary policy (interest rate cuts) rather than fiscal policy.

An Example of Discretionary Fiscal Policy Would Be