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Answer: A rise in government spending driven by new infrastructure initiatives.
**Explanation:** - **Option A** is incorrect because changes in corporate tax revenues due to profitability fluctuations are automatic stabilizers, not discretionary fiscal policy actions. These changes occur without government intervention. - **Option B** is correct because discretionary fiscal policy involves deliberate government actions, such as increasing spending on infrastructure projects, to influence aggregate demand and stabilize the economy. This is a proactive measure taken by policymakers. - **Option C** is incorrect because unemployment benefits are part of automatic stabilizers. They adjust automatically based on economic conditions without requiring policy changes. Discretionary fiscal policy requires explicit legislative or administrative decisions, distinguishing it from automatic stabilizers, which operate passively.
Author: LeetQuiz Editorial Team
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Which of the following changes is most indicative of a discretionary fiscal policy action?
A
A decline in corporate tax revenues resulting from reduced corporate profitability.
B
A rise in government spending driven by new infrastructure initiatives.
C
An increase in unemployment benefit payments due to rising unemployment rates.
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