Final answer:
A discretionary fiscal policy employed during the Great Recession was the 2009 stimulus package, consisting of tax cuts and spending increases designed to boost aggregate demand and combat the economic downturn.
Step-by-step explanation:
During the Great Recession, a key discretionary fiscal policy that helped to stabilize the economy was the 2009 stimulus package. This package included a combination of tax cuts and spending increases, which were designed to boost aggregate demand and counteract the economic downturn. Unlike automatic stabilizers like unemployment insurance and food stamps, which operate without the need for new legislation, discretionary fiscal policies require the government to enact new laws to adjust tax or spending levels.
The 2009 stimulus aimed to provide relief to those affected by the recession through direct spending in areas like infrastructure, education, and energy. It also aimed to provide federal tax incentives and benefits for individuals and businesses. This type of policy is used in times of economic distress to inject additional spending into the economy, with the goal of reducing unemployment and encouraging economic growth.