Why wasn't the stimulus passed in 2009 effective in reducing unemployment during the recession of 2009-10?

A) Congress cut the size of the final package, it was skewed toward tax cuts, and it was only 25% of the amount needed to restore GDP to full employment.
B) The administration mismanaged it—and it was much too large.
C) Fiscal policy is ineffective in a liquidity trap.
D) Tax cuts and interest rate cuts would have been effective, but they were politically undesirable.


Ans: A) Congress cut the size of the final package, it was skewed toward tax cuts, and it was only 25% of the amount needed to restore GDP to full employment.

Economics

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Economics