This is the correct answer.E. Discretionary fiscal policy is the term used to describe actions made by the government. The Fed votes to raise or lower rates at its regular Federal Open Market Committee meeting but may take about six months for the impact of the rate cut to percolate throughout the economy. Nondiscretionary fiscal policy refers to various ongoing programs of government spending and taxation. 3 The time-lag aspect regarding fi scal policies is highlighted by A. Blinder, “The case against the case against discretionary fi scal policy”, CEPS Working Paper 100, June, 2004. discretionary fiscal policy with changes in the cyclically-adjusted primary balance. B. initiated by a Presidential proclamation. The relationship, however, is weak and not sta-tistically significant. As many authors have emphasized,4 U.S (2) Discretionary fiscal policy. To find out what is discretionary fiscal policy, see this explanation. The first is taxation. Examples include increases in spending on roads, bridges, stadiums, and other public works. Define discretionary fiscal policy. B. the authority that the president has to change personal income tax rates. Monetary policy works faster than fiscal policy. Discretionary fiscal policy is defined as fiscal policy A. left to the discretion of military authorities. Fiscal policy has been a central tool for governments to counteract economic stagnation in the recent crisis, both in terms of automatic stabilization as well as discretionary fiscal policy. B) the use of Congressional power to pursue social and political goals. Tools Discretionary fiscal policy uses two tools. Fiscal policy refers to the use of government spending and tax policies to influence macroeconomic conditions, including aggregate demand, employment, inflation and economic growth. C) the discretionary changing of government expenditures and/or taxes to achieve fiscal-policy definition: Noun (plural fiscal policies) 1. It complements central bank monetary policy. Discretionary fiscal policy a. may reassure investors and consumers that the federal government will be able to avert a major economic downturn. Discretionary Fiscal Policy: The central government exercises discre­tionary fiscal policy when it identifies an unemployment or inflation problem, esta­blishes a policy objective concerning that problem, and then deliberately adjusts taxes and/or spending accordingly. Countercyclical policies aim to move demand in the opposite direction to the economic cycle eg increases in public spending in slumps Discretionary fiscal policy is defined as fiscal policy a. left to the discretion of military authorities b. initiated by and act of Congress c. initiated by a Presidential proclamation d. triggered by the state of … But there are, of course, other determinants of fiscal policy. This paper studies the impact of political polarization on macroeconomic volatility in a political economy model of optimal fiscal policy. rise in the GDP gap, consistent with the use of discretionary counter-cyclical fiscal policy. For all these reasons, discretionary fiscal and monetary policy is as much an art as a science. Need to define discretionary fiscal policy? Following the literature (e.g., Alesina and Perotti 1995), the event-study analysis identifies discretionary changes as “large” changes in the policy instruments, because even policy The largest is the military budget.. Fiscal policy - definitionFiscal policy refers to the use of taxes and government spending to achieve desirable changes in aggregate demand.There are three components of fiscal policy:Discretionary changes in tax rates - this generally means making changes in tax rates at times when they are needed. The main novelty of this paper is the use, on the revenue side, of a dataset of fiscal measures based on the yield Fiscal policy describes two governmental actions by the government. Further, explain why having a balanced budget might not be desirable (hint, think about how it might limit automatic stabilizers). Discretionary fiscal policy is the purposeful change of government expenditures and tax collections by government to promote full employment, price stability, and economic growth. ABSTRACT This paper looks at the impact of discretionary fiscal policy on economic growth for a sample of 18 EU countries over the period 1998-2011. This blog is part of a special series on the response to the coronavirus. Discretionary fiscal policy refers to: A. any change in government spending or taxes that destabilizes the economy. These are primarily for income maintenance purpose. Monetary policy refers to the Federal Reserve's work with the money supply to influence the economy. 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