During the 2008-2009 period, the conventional monetary policy response was to _____ the target federal funds rate, while the conventional fiscal policy response was to _____ taxes and to _____ government spending.

Question

Quizplus · Accepted Answer

During the 2008-2009 period, the Federal Reserve decreased the target federal funds rate through conventional monetary policy to stimulate borrowing and spending. On the other hand, the government decreased taxes and increased government spending through conventional fiscal policy to stimulate demand and boost economic growth. Therefore, the correct option is D where the target federal funds rate was decreased, taxes were decreased, and government spending was increased.

During the 2008-2009 Period, the Conventional Monetary Policy Response Was