Differentiate contractionary fiscal policy
from Expansionary fiscal policy
What is discretionary fiscal policy?
Contractionary fiscal policy is a type of fiscal policy that is used to reduce the size of the economy by decreasing government spending and/or increasing taxes. This type of policy is used to reduce inflation and slow economic growth. It is the opposite of expansionary fiscal policy, which is used to increase economic growth and reduce unemployment.
Discretionary fiscal policy is a type of fiscal policy that is implemented by the government to influence the economy. It involves the government making decisions about how much to spend and how much to tax in order to achieve a desired economic outcome. This type of policy is used to stimulate the economy or to slow it down, depending on the current economic situation.