Which of the following is not a reason why the stimulus package that the government implemented during the Great Recession of 2007-09 did not have as strong an impact on GDP and unemployment as expected?
A)Households had very high debt levels.
B)Consumers raised their saving rates.
C)The stimulus package caused prices to fall in many sectors.
D)The effects of the stimulus package were diffuse and spread thinly among many sectors.

Question

Quizplus · Accepted Answer

The stimulus package did not cause prices to fall; rather, high household debt and increased saving rates reduced consumer spending, and the effects were spread thinly across sectors, limiting its impact.

Which of the Following Is Not a Reason Why the Stimulus