Explain whether each of the following is a (1) discretionary fiscal policy, (2) an automatic stabilizer, or (3) not a fiscal policy.
Government spending on infrastructure, such as highways and bridges
Treasury Department’s sales or purchases of government securities on the open market
Unemployment insurance paid to those who lose their jobs in a recession
Proportional income taxes
The Fed’s sales of government securities to affect the federal funds rate
A 5% decrease in all income taxes