Conventional monetary and fiscal policies during a financial crisis are aimed at _____, while acting as a lender of last resort or injecting government funds into the financial system during a financial crisis is aimed at _____.
A)increasing output; reducing inflation
B)expanding aggregate demand; restoring confidence in the financial system
C)increasing corporate wealth; increasing household wealth
D)expanding aggregate supply; reducing the national debt

Question

Quizplus · Accepted Answer

Conventional monetary and fiscal policies aim to expand aggregate demand to stimulate the economy, while actions like acting as a lender of last resort or injecting funds are aimed at restoring confidence in the financial system during a crisis.

Conventional Monetary and Fiscal Policies During a Financial Crisis Are