Suppose the government purposely changes the economy's cyclically adjusted budget from a deficit of 0 percent of real gdp to a deficit of 3 percent of real gdp. the government is engaging in a (n)

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Sarah Rivas

Business

9 October, 20:20

Suppose the government purposely changes the economy's cyclically adjusted budget from a deficit of 0 percent of real gdp to a deficit of 3 percent of real gdp. the government is engaging in a (n)

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Petie · Answer 1

Discretionary fiscal policy.

Compared to automatic stabilizers, if the government is actively changing the deficit or policy measures that contribute to it, then it would be a deliberate act which is basically the discretionary fiscal policy.