Which of the following was an argument for using fiscal policy in situations like the Great Recession?
a. Congress can act quickly.
b. The size of a recessionary gap may require the use of both fiscal and monetary policy.
c. Once the federal funds rate is reduced to zero, monetary policy is less effective.
d. all of the above
a
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Everything else held constant, if a central bank makes an unsterilized ________ of foreign assets, then the domestic money supply will increase and the domestic currency will ________
A) purchase; appreciate B) purchase; depreciate C) sale; appreciate D) sale; depreciate
In the short run, if aggregate demand shifts to the left while the position of the short-run aggregate supply curve does NOT change, then
A) the level of economic activity rises. B) a recessionary gap occurs. C) there is no change in real GDP and the price level. D) an inflationary gap occurs.