Which of the following is a discretionary fiscal policy action?
A) an increase in the amount of unemployment compensation because more people become unemployed
B) a progressive tax system that leads to an increase in income tax revenues from the rich
C) a deliberate tax increase when the economy experiences high inflation
D) an increase in Supplemental Security Income payments when more people become eligible for the benefits

Question

Quizplus · Accepted Answer

A deliberate tax increase during high inflation is a discretionary fiscal policy action because it is a policy action taken by the government to directly influence the economy. The other options listed are automatic stabilizers that would automatically adjust based on economic conditions, without direct government intervention.

Which of the Following Is a Discretionary Fiscal Policy Action