What Are the Two Types of Discretionary Fiscal Policy

question 62

Multiple Choice

What are the two types of discretionary fiscal policy?

• A) automatic and expansionary
• B) expansionary and contractionary
• C) expansionary and recessionary
• D) automatic and contractionary

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Definitions:

Polluting Firms

Companies that release pollutants into the environment as a byproduct of their activities, often subject to regulation and mitigation measures.

Excise Tax

A tax levied on specific goods or services, such as tobacco, alcohol, or gasoline, at the point of manufacture or distribution.

Price Elasticity

A measure of how much the demand or supply of a product changes in response to a change in its price.

Incidence

The allocation or impact of an economic activity or policy, especially in terms of who bears the cost or receives the benefits.