Discretionary fiscal policy includes:

Question

Quizplus · Accepted Answer

Discretionary fiscal policy refers to the deliberate actions taken by the government to influence the economy through changes in tax policy and government spending. New tax and spending decisions are examples of discretionary fiscal policy.

Answer: B and D are incorrect 
 Spending decisions from previous years and tax decisions from previous years are not considered discretionary fiscal policy since they were not recently made with the intention of influencing the economy.

Answer: C is incorrect 
 Automatic stabilizers are not considered discretionary fiscal policy since they are built-in features of the tax and welfare systems that automatically respond to changes in economic conditions.

Discretionary Fiscal Policy Includes