Which argument was made in favor of using discretionary fiscal policy in fighting the Great Recession?
A) Monetary policy could not be effective, since interest rates were near zero.
B) If taxes were increased, the budget could be balanced.
C) If government spending decreased, the budget surplus would increase.
D) The lags associated with monetary policy would be destabilizing.

Question

Quizplus · Accepted Answer

The argument made in favor of using discretionary fiscal policy in fighting the Great Recession was that monetary policy could not be effective, since interest rates were near zero. Therefore, fiscal policy was seen as a more effective tool for stimulating the economy.

Which Argument Was Made in Favor of Using Discretionary Fiscal