Discretionary fiscal policy:
A)is not subject to lags and therefore is effective at controlling business cycles.
B)refers to changes in the money supply used to smooth out the economy's ups and downs.
C)is favored by monetarists.
D)is favored by Keynesians.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy involves deliberate changes in government spending and taxation, and is often favored by Keynesians who believe that government intervention is necessary to stabilize the economy. However, discretionary fiscal policy can suffer from implementation lags, making its effectiveness less certain.

Discretionary Fiscal Policy