discretionary

(adjective)

Available at one's discretion; able to be used as one chooses; left to or regulated by one's own discretion or judgment.

Related Terms

  • expansionary monetary policy

Examples of discretionary in the following topics:

  • Arguments For and Against Discretionary Monetary Policy

    • Discretionary policies refer to subjective actions taken in response to changes in the economy.
    • For much of the 20th century, governments adopted discretionary policies to correct the business cycle.
    • A discretionary policy is supported because it allows policymakers to respond quickly to events.
    • This can create compounding issues related to the discretionary policy enacted.
    • A compromise between strict discretionary and strict rule-based policy is to grant discretionary power to an independent body.
  • Automatic Stabilizers Versus Discretionary Policy

    • Automatic stabilizers and discretionary policy differ in terms of timing of implementation and what each approach sets out to achieve.
    • In practice, most policy changes are discretionary in nature.
    • With discretionary policy there is a significant time lag.
    • Discretionary policies can target other, specific areas of the economy.
    • Discretionary policies can address failings of the economy that are not strictly tied to aggregate demand.
  • Difficulty in Getting the Timing Right

    • Discretionary fiscal policy relies on getting the timing right, but this can be difficult to determine at the time decisions must be made.
    • A nation can respond to economic fluctuations through automatic stabilizers or through discretionary policy.
    • With discretionary fiscal policy, timing plays a very significant role.
    • Discretionary policy often requires that a set of laws must be passed through a legislature.
    • Once the discretionary program is in place, the next step is to measure its effectiveness.
  • Disposable Income

    • Discretionary income is disposable income minus all payments that are necessary to meet current bills.
    • Discretionary income = Gross income - taxes - all compelled payments (bills)
    • Disposable income is often incorrectly used to denote discretionary income.
  • Arguments For and Against Fighting Recession with Expansionary Monetary Policy

    • Monetary policy uses a variety of discretionary tools to control one or both of these to influence outcomes like economic growth, inflation, exchange rates with other currencies, and unemployment.
    • Assess the value of discretionary expansionary monetary policy and the associated shortcomings.
  • Effect of a Government Budget Deficit on Investment and Equilibrium

    • Unlike the cyclical budget deficit, a structural deficit is the result of discretionary, not automatic, fiscal policy.
    • While automatic stabilizers don't actually shift the aggregate demand curve (because transfer payments and taxes are already built into aggregate demand), discretionary fiscal policy can shift the aggregate demand curve.
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