Changes that do not occur automatically but rather are made at the option of the federal government are known as (one word) fiscal policy.
Question
Changes that do not occur automatically but rather are made at the option of the federal government are known as (one word) fiscal policy.
Solution
The changes that do not occur automatically but rather are made at the option of the federal government are known as discretionary fiscal policy. Discretionary fiscal policy refers to the deliberate actions taken by a government to manage its economy, particularly in terms of government spending and taxation. This type of policy is distinct from automatic stabilizers, such as unemployment benefits or tax brackets, which automatically adjust with economic conditions without requiring new legislation.
Discretionary fiscal policy can be implemented in response to specific economic conditions, such as recessions or booms, to either stimulate growth or cool down an overheated economy. Examples include increasing government spending on infrastructure projects to create jobs or adjusting tax rates to influence consumer spending. The effectiveness of discretionary fiscal policy can depend on various factors, including the timing of the policy measures and the current state of the economy.
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