Question

What is the distinction between automatic and discretionary fiscal​ policy? Automatic fiscal policy is​ ______. Discretionary fiscal policy is​ ______ . a. the multiplier effect that follows an increase in government​ expenditure; initiated by an act of Congress b. triggered by the state of the economy with no action by​ government; initiated by an act of Congress c. the multiplier effect that follows an increase in government​ expenditure; initiated by the President of the United States d. triggered by the state of the economy with no action by​ government; initiated by the President of the United States

Answer 1

Answer:

The correct answer is option b.

Explanation:

An automatic fiscal policy is a policy that corrects the fluctuations in the economy through its normal working without any intervention by the government.

A discretionary fiscal policy, on the other hand, is planned and excercised by the government.

It works through increase in taxes or reduction in the government spending without government.