Which one of the following statements about the implementation of fiscal policy is correct?
Expansionary fiscal policy is typically characterized by a reduction in government spending and an increase in income tax.
Automatic stabilizers reduce the severity of economic fluctuations without any deliberate legislative action by the government.
A budget surplus occurs when government expenditure exceeds tax revenue in a given financial year.
Fiscal policy is solely managed by the central bank to control inflation through changes in exchange rates.
