In response to the recession of 2008-2009, the fiscal policy of the federal government was
a. highly expansionary, and this Keynesian stimulus promoted a rapid recovery.
b. highly expansionary, but this was largely offset by the Fed's restrictive monetary policy
c. highly restrictive, but this was largely offset by the Fed's highly expansionary monetary policy
d. highly expansionary, but the unemployment rate nonetheless remained high during 2010 and 2011
D
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Technology transfer comes only from nations importing new capital goods in the current account
Indicate whether the statement is true or false
A country reduces its government budget deficit and also makes political reforms that lead people to believe this country's assets are less risky. Given the combination of a reduced deficit and lower asset risk, what happens to the interest rate?
What role does population growth play in economic development?
What will be an ideal response?