A final problem for discretionary fiscal policy arises out of the difficulties of explaining to politicians how countercyclical fiscal policy that runs against the tide of the business cycle should work. Therefore, a discretionary fiscal policy will stabilize the economy most when surpluses are incurred during inflation and deficits during recessions. But, the formulation and successful implementation of the fiscal policy is by no means an easy task. Fiscal policy is the use of government spending and tax policy to influence the path of the economy over time. A final problem for discretionary fiscal policy arises out of the difficulties of explaining to politicians how countercyclical fiscal policy that runs against the tide of the business cycle should work. 1. A discretionary fiscal policy is the level of legislative parameters which are used as action policies for providing stimulus for the effect of control of economic recession. These changes occur on a year by year basis and are used to reflect the current economic status. Discretionary fiscal policy is based on the ad hoc judgment of policymakers as opposed to policy set by predetermined rules. While the government has a role in promoting economic growth, full employment and price stability, its methods for doing so frequently are subject to contentious debate. Fiscal policy, measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures. Learn more about fiscal policy in this article. Limitations Of Discretionary Fiscal Policy assignment help Policy Lags: During the recent times, there is not much argument about the desirability or otherwise of a discretionary fiscal policy. a decrease in government expenditure and an increase in taxes by a decision of Congress; a decrease in transfer payments and an increase in taxes with no interference by Congress. Most people chose this as the best definition of discretionary-fiscal-policy: A fiscal policy achieved... See the dictionary meaning, pronunciation, and sentence examples. Automatic fiscal policy that might occur is _____. Fiscal Policy. It is believed that the discretionary fiscal policy is a very effective tool that the government can use for the stabilization of the economy. A final problem for discretionary fiscal policy arises out of the difficulties of explaining to politicians how countercyclical fiscal policy that runs against the tide of the business cycle should work. The burning question in this context is related with the timing of the fiscal … Fiscal measures are frequently used in tandem with monetary policy to achieve certain goals. Discretionary fiscal policy that might occur is _____. Discretionary fiscal policy is the term used to describe actions made by the government. Fiscal policy -- government taxing and spending -- almost always is controversial. 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