Which one of the following is an example of discretionary fiscal policy used to correct an inflationary gap?
A) a tax increase passed into law by Congress
B) decrease in the money supply by the Federal Reserve
C) an increase in government expenditures approved by Congress
D) an agreement among major banks to lower interest rates

Question

Quizplus · Accepted Answer

Discretionary fiscal policy involves deliberate changes in government spending or taxation by Congress to influence the economy. A tax increase is a fiscal policy tool used to reduce inflationary pressures.

Which One of the Following Is an Example of Discretionary