Problem
Introduces two types of policies: automatic stabilizers and discretionary spending. Recall that discretionary fiscal policy occurs when the government passes a new law that explicitly changes overall tax or spending levels to influence the level of overall economic activity. We also reviewed some potential issues that may arise with discretionary spending.
For this discussion, your task* is to:
A. Propose a policy that utilizes discretionary fiscal spending, then explain the benefits and purpose of this policy.
B. Describe the type of monetary policy the Fed could introduce that would lower the need for discretionary fiscal spending.