Which of the following is an example of a discretionary fiscal policy action?
A) increasing government spending to deal with a recession
B) a decrease in tax revenues as taxpayers' incomes decrease
C) increasing the minimum wage rate
D) raising regulations in the health care industry
Ans: A) increasing government spending to deal with a recession
Explanation: Discretionary fiscal policy action reveals that government has two tools for economy growing faster. First to increase the taxes with the increase in income of consumer and decrease the spending.
Two tools for recession, decrease in taxes when the income of consumer decreases and increase in spending.
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