Final answer:
The information needed to assess discretionary policy and determine whether it is expansionary, contractionary, or neutral is primarily provided by: 2) Monetary policy.
Step-by-step explanation:
Monetary policy, implemented by a country's central bank, involves the regulation of money supply and interest rates. The key indicators for assessing the nature of monetary policy include interest rate changes, open market operations, and reserve requirements.
An expansionary monetary policy aims to stimulate economic growth by lowering interest rates and increasing the money supply, while a contractionary policy seeks to curb inflation by raising interest rates and reducing the money supply. The neutrality of monetary policy occurs when there are no active measures taken to influence the economy.
In contrast, fiscal policy (Option 1) involves government spending and taxation and is typically categorized as expansionary when spending increases or taxes decrease, and contractionary when spending decreases or taxes increase. Supply-side policy (Option 3) focuses on improving the production side of the economy, and demand-side policy (Option 4) pertains to managing aggregate demand. However, for specifically determining whether a policy is expansionary, contractionary, or neutral, the focus on interest rates and money supply changes associated with monetary policy is crucial.