Which of the following is an example of discretionary fiscal policy?
A) An increase in the number of unemployment benefit payments during a recession due to rising unemployment.
B) An increase in income tax receipts during an expansion because incomes are rising.
C) Tax increases to combat rising inflation.
D) A decrease in income tax receipts during a recession because incomes are falling.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy involves deliberate actions by the government to influence the economy, such as changing tax rates or government spending. Tax increases to combat rising inflation is a deliberate action, making it an example of discretionary fiscal policy.

Which of the Following Is an Example of Discretionary Fiscal