Which of the following is an example of a discretionary fiscal policy action?

Discretionary fiscal policy involves deliberate actions taken by the government to influence the economy, typically through spending and taxation. These actions require specific legislation or decision-making processes to implement and do not occur automatically in response to economic conditions.

In this context, a government spending package passed by Congress is a prime example of discretionary fiscal policy. Such a package typically involves a planned increase in government expenditure aimed at stimulating economic activity, which is a decision made in response to current economic challenges or goals.

The other options represent automatic stabilizers or responses that occur without the need for new legislation. For instance, unemployment benefits and welfare payments automatically adjust based on economic conditions, functioning as safety nets that activate when certain thresholds are met (like increased unemployment). Tax cuts that happen as the economy grows also reflect automatic adjustments rather than discretionary actions, as they typically result from pre-set tax structures that respond to income levels.

Overall, the selected answer emphasizes a proactive approach by the government, highlighting that discretionary fiscal policy is characterized by its intentional and legislative-driven nature, making it distinct from automatic fiscal responses.