The Difference Between Automatic Fiscal Policy and Discretionary Fiscal Policy

question 257

Multiple Choice

The difference between automatic fiscal policy and discretionary fiscal policy is that

• A) Congress initiates automatic fiscal policy.
• B) the President has nothing to do with discretionary fiscal policy.
• C) Congress must pass laws implementing discretionary fiscal policy.
• D) the President initiates discretionary fiscal policy.

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Definitions:

Balance Sheet

A document detailing a firm's assets, liabilities, and owners' equity at a particular moment.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, revealing profit or loss.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Net Sales

Gross sales minus sales returns, allowances, and discounts.