This Question: 1 pt 2 of 15 (15 complete) | This Quiz: 15 pts possible Briefly e

Question

This Question: 1 pt 2 of 15 (15 complete) | This Quiz: 15 pts possible Briefly explain whether each of the following is an example of (1) a discretionary fiscal policy, (2) an automatic stabilizer, or (3) not a fiscal policy The federal government increases spending on rebuilding the New Jersey shore following a hurricane This is an example of O A. an automatic stabilizer. B. a discretionary fiscal policy 0 C, not a fiscal policy The Federal Reserve sells Treasury securities. This is an example of A. not a fiscal policy. O B. an automatic stabilizer. ° C, a discretionary fiscal policy. The total the federal government pays out for unemployment insurance decreases during an expansion This is an example of O A. a discretionary fiscal policy. B. an automatic stabilizer. O C. not a fiscal policy. The revenue the federal government collects from the individual income tax declines during a recession

Explanation / Answer

1) Your first answer is wrong, the right answer will be not a fiscal policy. A fiscal policy can be defined as government adjusting its expenditure level and taxes to regulate the economy, remember most important key word here is to regulate the economy. If government increase its spending for the agriculture sector that affects the economy as a whole and creates jobs, increase incomes etc that would qualify for a fiscal policy. But repairing a beach will not qualify for this category this is just government spending, not a fiscal policy measure.

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