Congress would be engaging in Discretionary Fiscal Policy.

Here's why:

1. Monetary Policy: This is controlled by the Federal Reserve (or the central bank), not Congress. It involves controlling the money supply, primarily through interest rates.

2. Discretionary Fiscal Policy: This is controlled by the government, specifically Congress. It involves changing tax rates and levels of government spending to influence the economy. Extending tax cuts falls under this category.

3. Contractionary Fiscal Policy: This involves reducing government expenditures or increasing taxes. Extending tax cuts is the opposite of this, so it doesn't apply.

4. Automatic Stabilizer type policy: These are policies that automatically come into effect to stabilize an economy without the need for more direct intervention by the government. Examples include unemployment insurance and food stamps. Extending tax cuts is a deliberate action, not an automatic response, so it doesn't fall under this category.

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Congress would be engaging in Discretionary Fiscal Policy.

Here's why:

1. Monetary Policy: This is controlled by the Federal Reserve (or the central bank), not Congress. It involves controlling the money supply, primarily through interest rates.

2. Discretionary Fiscal Policy: This is controlled by the government, specifically Congress. It involves changing tax rates and levels of government spending to influence the economy. Extending tax cuts falls under this category.

3. Contractionary Fiscal Policy: This involves reducing government expenditures or increasing taxes. Extending tax cuts is the opposite of this, so it doesn't apply.

4. Automatic Stabilizer type policy: These are policies that automatically come into effect to stabilize an economy without the need for more direct intervention by the government. Examples include unemployment insurance and food stamps. Extending tax cuts is a deliberate action, not an automatic response, so it doesn't fall under this category.

Knowee AI · Accepted Answer

Congress would be engaging in Discretionary Fiscal Policy.

Here's why:

1. Monetary Policy: This is controlled by the Federal Reserve (or the central bank), not Congress. It involves controlling the money supply, primarily through interest rates.

2. Discretionary Fiscal Policy: This is controlled by the government, specifically Congress. It involves changing tax rates and levels of government spending to influence the economy. Extending tax cuts falls under this category.

3. Contractionary Fiscal Policy: This involves reducing government expenditures or increasing taxes. Extending tax cuts is the opposite of this, so it doesn't apply.

4. Automatic Stabilizer type policy: These are policies that automatically come into effect to stabilize an economy without the need for more direct intervention by the government. Examples include unemployment insurance and food stamps. Extending tax cuts is a deliberate action, not an automatic response, so it doesn't fall under this category.

If Congress extends the tax cuts that were initiated last year, it would be engaging inGroup of answer choicesMonetary PolicyDiscretionary Fiscal PolicyContractionary Fiscal PolicyAutomatic Stabilizer type policy

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