Discretionary Fiscal Policy

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Implement Discretionary Fiscal policies by increasing spending itself or by cutting people taxes so that they have more disposable income to spend. Discretionary fiscal policy requires new legislation to change either government spending or taxes in order to stabilize the economy. (Tucker, 2014) Fiscal policy can stabilize aggregate demand by adding to demand during recessions and subtracting from demand during business expansions.
If the economy is in a recession, the government may decide to increase aggregate demand, or decrease taxes to stimulate the economy and increase aggregate demand. According to Kimberly Amadeo an Economic Expert for About.com and Author of Beyond the Great Recession, US Economic outlook is healthy according to the

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