Discretionary fiscal policy

a. may reassure investors and consumers that the federal government will be able to avert a major economic downturn.

b. is not very effective in influencing real gdp during normal times because of time lags.

c. can be very effective in influencing real gdp during abnormal times, such as when a nation is at war.

d. all of the above

Question

Terrence Nunez

Business

19 October, 08:12

Discretionary fiscal policy

a. may reassure investors and consumers that the federal government will be able to avert a major economic downturn.

b. is not very effective in influencing real gdp during normal times because of time lags.

c. can be very effective in influencing real gdp during abnormal times, such as when a nation is at war.

d. all of the above

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Answers (1)

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Marlene Morales · Answer 1

The answer is option "d", all of the above.

Discretionary fiscal policy

a. may reassure investors and consumers that the federal government will be able to avert a major economic downturn.

b. is not very effective in influencing real GDP during normal times because of time lags.

c. can be very effective in influencing real GDP during abnormal times, such as when a nation is at war.

We can define discretionary fiscal policy as when there is a change in government expenditures or taxes to gain national economic goals.