Discuss how actions taken by the Federal Reserve during the Great Recession influenced government spending.
What will be an ideal response?
The quantitative easing policies used by the Fed during the Great Recession created two major incentives for the government to increase spending. First, the low interest rates the government paid on its debts encouraged spending. The Fed also was a willing buyer for the securities that fund government debt, being the government’s primary lender.
You might also like to view...
On Thanksgiving, Jake's mother gives him a huge platter of food. If Jake were to keep eating just to please his mother (even when he really wanted to stop long ago), his marginal utility of eating that last bite would be
a. the same as his total utility b. large c. minus one d. positive e. negative
Define the terms recessionary gap and inflationary gap. Why do they occur?