Describe the discretionary and automatic fiscal policy

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Question: Suppose the economy is in a recession, and the recessionary gap is large.

a. Describe the discretionary and automatic fiscal policy actions that might occur.

b. Describe a discretionary fiscal stimulation package that could be used that would not bring an increase in the budget deficit.

c. Explain the risks of discretionary fiscal policy in this situation.

Reference no: EM131979980

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