Which of the Following Best Illustrates the Use of Discretionary

question 28

Multiple Choice

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

• A)Congress provides $1 billion in relief aid for hurricane victims.
• B)Congress 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)The Federal Reserve tightens credit when it receives news of accelerating inflation.
• E)Congress passes a bill authorizing $2 billion in additional spending when it receives news of a deepening recession.