Over the period 1890-2014, Japan experienced a 2.59 percent average annual growth rate of real GDP per person

The policy response to the recession of 2008-2009 provided an experiment on the potency of Keynesian fiscal policy. In what respect was this true?

a. The money supply increased rapidly and the short-term interest rates were pushed to near zero just as the Keynesian model of fiscal policy recommends. b. Government spending increased sharply and the budget deficits were large just as the Keynesian model of fiscal policy recommends. c. The money supply increased rapidly and the budget was shifted toward a surplus just as the Keynesian model recommends. d. The federal budget was balanced just as the Keynesian model indicates would be prudent policy during a recession.

Which of the following contributed to the weak recovery from the 2008-2009 recession?

a. constant policy changes that generated uncertainty and undermined private investment b. the restrictive monetary policy followed by the Fed c. the tax increases instituted by a Congress intent on balancing the budget d. the inability of the federal government to borrow because of the sharply higher interest rates