Discretionary ﬁscal policy is so named because it
A) is undertaken at the option of the nation's central bank.
B) occurs automatically as the nation's level of GDP changes.
C) involves speciﬁc changes in taxes and government spending undertaken expressly for stabilization at the option of Congress.
D) is invoked secretly by the Council of Economic Advisers.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy involves intentional and explicit changes in taxes and government spending, decided upon by Congress or the President, with the goal of stabilizing the economy. It is not automatic (option B) or secret (option D), and it is not undertaken by the central bank (option A).

Discretionary ﬁScal Policy Is So Named Because It