Q14 · Practice questionSimple familiar1 mark
QUESTION 14
Which is a discretionary fiscal response to a recession?
(A)
Income-tax receipts fall under unchanged tax rates.
(B)
Benefit payments rise under unchanged eligibility rules.
(C)
The central bank lowers its cash-rate target.
(D)
Parliament approves an additional temporary public-works program.
WORKED SOLUTION
1 markAnswer D
Answer
D
Working
An additional public-works allocation requires a new fiscal decision. The unchanged-rule responses are automatic stabilisers; a cash-rate decision is monetary policy.
Marking criteria
- Select D. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
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