Which of the following best represents discretionary fiscal policy?

CA Foundation · Business Economics · MTP · January 2026
Which of the following best represents discretionary fiscal policy?
(A) A. Progressive taxation
(B) B. Unemployment allowance
(C) C. Increase in public spending by budget decision
(D) D. Automatic tax adjustments

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Increase in public spending by budget decision

Topics: Public Finance

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