An Example of Automatic Fiscal Policy Is

question 30

Multiple Choice

An example of automatic fiscal policy is

• A) Parliament passing a tax rate reduction package.
• B) the Reserve Bank reducing interest rates as economic growth slows.
• C) the Commonwealth government expanding spending at the Department of Education and Training.
• D) expenditure for unemployment benefits increasing as economic growth slows.
• E) a change in taxes that has no multiplier effect.

---

Definitions:

Economic Change

Adjustments in the economic conditions or structures, which can affect employment, inflation rates, and overall economic growth.

Common Currency

A currency that is used by multiple countries, enabling easier trade and economic policy coordination, such as the Euro in the European Union.

European Union

A political and economic union of 27 European countries that are located primarily in Europe, aiming to foster economic cooperation and maintain peace.

Efficiently Manage Time

The act of organizing, planning, and prioritizing one's activities and commitments to maximize productivity and achieve objectives within given time constraints.