Traditional Keynesians tend to favor
A)monetary policy over fiscal policy because of the effectiveness of central banks.
B)monetary policy over fiscal policy because it reduces interest rates..
C)fiscal policy over monetary policy because it doesn't impact interest rates.
D)fiscal policy over monetary policy because of the liquidity trap.
E)none of the above.

Question

Quizplus · Accepted Answer

Traditional Keynesians favor fiscal policy over monetary policy, especially in situations like a liquidity trap, where monetary policy becomes ineffective because people hoard cash instead of spending it.

Traditional Keynesians Tend to Favor