A fiscal action that is triggered by the state of the economy is called
A) automatic fiscal policy.
B) the government expenditure multiplier.
C) generational fiscal policy.
D) discretionary fiscal policy.

Question

Quizplus · Accepted Answer

Automatic fiscal policy refers to changes in government spending and/or taxation that are built into the system and activated by changes in economic conditions, such as changes in GDP or inflation. These policies do not require new action or intervention by policymakers, but instead are activated automatically. The other choices are not accurate descriptions of this type of fiscal policy.

A Fiscal Action That Is Triggered by the State of the Economy