Countercyclical Macroeconomic Policy - Countercyclical Fiscal Policy

4 important questions on Countercyclical Macroeconomic Policy - Countercyclical Fiscal Policy

What are Automatic Countercyclical Components?

Components of the government budget that automatically adjust to smooth out economic fluctuations.

What are Discretionary Countercyclical Components?

Aspects of fiscal policy that the government consciously does in response to economic fluctuations.

Why might households hold back on spending their tax cuts?

1) Consumption might offer diminishing returns
2) They might want to save money to be prepared for a future increase in taxes
  • Higher grades + faster learning
  • Never study anything twice
  • 100% sure, 100% understanding
Discover Study Smart

What is Pork Barrel Spending?

Inefficient public spending which is valued by politicians because it increases their popularity with their constituents(voters).

The question on the page originate from the summary of the following study material:

  • A unique study and practice tool
  • Never study anything twice again
  • Get the grades you hope for
  • 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
Trustpilot Logo