What is countercyclical discretionary fiscal policy?

Countercyclical discretionary fiscal policy calls for (c) deficits during recessions and surpluses during periods of demand-pull inflation. Countercyclical discretionary fiscal policy goes against the current norms related to the economy. The main objective of this is to manage the fluctuations in the economy.

What does discretionary fiscal policy refer to?

Discretionary fiscal policy means the government make changes to tax rates and or levels of government spending. For example, cutting VAT in 2009 to provide boost to spending.

What are countercyclical fiscal policies?

Counter-cyclical fiscal measures are policy measures which counteract the effects of the economic cycle. For example, counter-cyclical fiscal policy actions when the economy is slowing would include increasing government spending or cutting taxes to help stimulate economic recovery.

Why is fiscal policy referred to as countercyclical policy?

Counter-cyclical fiscal policy refers to the steps taken by the government that go against the direction of the economic or business cycle. Thus, in a recession or slowdown, the government increases expenditure and reduces taxes to create a demand that can drive an economic boom.

Which is an example of countercyclical fiscal policy quizlet?

An example of countercyclical fiscal policy is: reducing government spending when the economy is operating above potential.

What is counter cyclical fiscal policy quizlet?

Countercyclical fiscal policy. a change in government purchases or net taxes designed to reverse or prevent a recession or a boom. Net tax multiplier. the amount by which real GDP changes for each one-dollar change in net taxes.

What is discretionary fiscal policy quizlet?

Discretionary fiscal policy is the purposeful change of government expenditures and tax collections by government to promote full employment, price stability, and economic growth.

What is an example of discretionary fiscal policy quizlet?

Discretionary fiscal policy is a policy action aimed at stabilizing the business cycle. Examples include changes in government spending and changes in taxes levied.

Which of the following is the best definition of the term countercyclical?

Which of the following is the best definition of the term “countercyclical”? Countercyclical means moving in the opposite direction of the business cycle of economic downturns and upswings.

What is a countercyclical policy quizlet?

Countercyclical Policies. Attempt to reduce the intensity of economic fluctuations and smooth the growth rates of employment, GDP, and prices. Countercyclical Monetary Policy. Reduces economic fluctuations by manipulating bank reserves and interest rates.

What is discretionary and non discretionary fiscal policy?

Discretionary Fiscal Policy: government spending and tax changes enacted at the time of the problem to alter the economy. Nondiscretionary Fiscal Policy: that set of policies that are built into the system to stabilize the economy (sometimes called automatic stabilizers)