Principles of Macroeconomics / Unit 14 MAC 1320 short lesson, about 20 seconds
Discretionary and Automatic
Captions available
The idea
Discretionary fiscal policy requires a new decision and a new law. Automatic stabilisers are already written into existing law and respond on their own as the economy moves, with no decision by anyone.
In practice
Income taxes and unemployment benefits are the two main ones.
Where people slip
Both change the budget balance, and only one of them was chosen this year.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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