Which of the Following Is an Example of Discretionary Fiscal

question 57

Multiple Choice

Which of the following is an example of discretionary fiscal policy?

• A)An increase in the number unemployment benefit payments during a recession due to rising unemployment.
• B)An increase in income tax receipts during an expansion because incomes are rising.
• C)Tax increases to combat rising inflation.
• D)A decrease in income tax receipts during a recession because incomes are falling.

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Definitions:

Constituency

A body of voters in a specified area who elect a representative to a legislative body.

Significance Level

The probability of rejecting the null hypothesis when it is actually true, often denoted by alpha (α) and used as a threshold in hypothesis testing.

Percentage Points

A unit for the difference of two percentages, reflecting the absolute difference between them.

Variance

A measure of the dispersion of a set of data points around their mean value.