Asked by
Insha Malik
on Oct 13, 2024
Verified
Statement I: The workings of the automatic stabilizers are part of discretionary fiscal policy.
Statement II: Countercyclical discretionary fiscal policy calls for deficits during recessions and surpluses during inflationary booms.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Discretionary Fiscal Policy
Government policies that involve changes in taxation and spending to influence the economy, used to manage economic cycles.
Countercyclical
An economic or fiscal policy or measure that moves in opposition to the business cycle, designed to reduce the volatility of the economic cycle by decreasing spending in booms and increasing it in recessions.
- Discern the part and consequence of automatic stabilizers in maintaining economic equilibrium.
- Learn the foundational concepts of fiscal policy and their application in securing economic stability.
Verified Answer
AS
Learning Objectives
- Discern the part and consequence of automatic stabilizers in maintaining economic equilibrium.
- Learn the foundational concepts of fiscal policy and their application in securing economic stability.