An example of a discretionary fiscal policy is when
A) Congress passes a law that raises personal marginal tax rates.
B) food stamp payments rise when the economy is in a recession.
C) unemployment compensation payments rise with unemployment rates.
D) tax receipts fall as incomes fall.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy involves deliberate actions by the government, such as passing new laws to change tax rates or government spending. Raising personal marginal tax rates through legislation is an example of such a deliberate action.

An Example of a Discretionary Fiscal Policy Is When