Which of the Following Illustrates the Use of Discretionary Fiscal

question 69

Multiple Choice

Which of the following illustrates the use of discretionary fiscal policy?  

• A) The Bank of Canada reduces its bank rate. 
• B) Government appropriates $500 million to help the needy, and the appropriation is financed by a tax on wealth. 
• C) Income tax receipts are smaller because of a decline in real GDP during a recession. 
• D) Parliament passes a bill authorizing $2 billion in additional spending when it receives news of a deepening recession.

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