Question

Discretionary fiscal policy will stabilize the economy most when Group of answer choices deficits are incurred during recessions and surpluses during inflations. deficits are incurred during inflations and surpluses during recessions budget surpluses are continuously incurred. the budget is balanced each year.

Answer 1

Answer:

deficits are incurred during recessions and surpluses during inflations

Explanation:

Discretionary fiscal policies are deliberate steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.

Discretionary fiscal policies can either be expansionary or contractionary

Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes. These policies are carried out in a recession when the government wants to increase total spending

Contractionary fiscal policies is when the government reduces the money supply in the economy either by reducing spending or increasing taxes . These policies are carried out in periods of inflation when the government wants to reduce money supply in the economy