Question

explain the difference between discretionary and automatic spending by the government. Please give an example of discretionary spending and automatic spending.

Answer 1

The discretionary spending of the government will approval of the Congress for example, government spending on the defence spending or on the new infrastructure. It depends in the government to where and how they want to spend it.

Automatic expenditure doesn't depend on the government approval ,they are just triggered due to some economic conditions in the market. For example an rising unemployment will lead to a higher unemployment compensation government doesn't have to approve that. It will be triggered automatically.