Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Discretionary fiscal policy Suppose the economy had been producing at potential output but is now producing above it . Which of the following are discretionary
Discretionary fiscal policy
Suppose the economy had been producing at potential output but is now producing above it Which of the following are discretionary fiscal policies that could bring the economy closer to potential output? Check all that apply.
Additional spending on bridge repairs
A tax cut
A tax increase
A reduction in spending on new road construction
In the preceding scenario, is the discretionary fiscal policy needed to bring the economy closer to potential output an example of expansionary fiscal policy or contractionary fiscal policy?
Contractionary
Expansionary
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started