If there is a deliberate change in taxes and spending, it is called
A)a recessionary gap.
B)an inflationary gap.
C)discretionary fiscal policy.
D)discretionary monetary policy.

Question

Quizplus · Accepted Answer

Discretionary fiscal policy refers to the deliberate changes in government spending and taxation to achieve macroeconomic goals such as stabilizing the economy and controlling inflation. Options A and B refer to situations where the economy is either producing below or above its potential level, and are not related to deliberate policy changes. Option D refers to deliberate changes in the money supply by the central bank, which is a form of monetary policy, not fiscal policy.

If There Is a Deliberate Change in Taxes and Spending