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Deliberate manipulation of government spending and taxes to promote macroeconomic goals is known as ________.

1) monetary policy
2) contractionary fiscal policy
3) discretionary fiscal policy
4) expansionary fiscal policy

Answer :

Discretionary fiscal policy refers to the conscious manipulation of taxation and government spending to influence the economy, distinct from monetary policy which is concerned with the money supply and interest rates.The correct option option ipt3


The deliberate manipulation of government spending and taxes to promote macroeconomic goals is known as discretionary fiscal policy.


This involves the government making conscious decisions to increase or decrease overall demand in the economy to achieve certain objectives like reducing unemployment or controlling inflation.


Expansionary fiscal policy is used to stimulate the economy by increasing government spending or cutting taxes, whereas contractionary fiscal policy is used to cool down an overheating economy by decreasing government spending or raising taxes.


Fiscal policy can be distinguished from monetary policy, which is the process by which a central bank controls the money supply, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.The correct option is 3

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