When the economy entered a serious recession in 2008, the response of the U.S. government was to institute a $700 billion bailout plan, pursue other heavy deficit spending, and take on unusually large liabilities through bond and money market fund guarantees. This is an example of:

Question

Quizplus · Accepted Answer

This is an example of functional finance and expansionary fiscal policy, where the government increases spending and takes on more debt to stimulate the economy during a downturn.

When the Economy Entered a Serious Recession in 2008, the Response