All of the following have been proposed as explaining the limited effectiveness of monetary policy during and after the financial crisis of 2007-2009 EXCEPT
A) recessions accompanied by financial crises tend to be severe.
B) prolonged levels of high unemployment had led to a reduction in the employment-population ratio that would be difficult to reverse.
C) the reluctance of the Fed to implement nonconventional policies.
D) structural changes as important sectors of the economy were deeply affected by the financial crisis.

Question

Quizplus · Accepted Answer

Choices A, B, and D are all commonly cited reasons for the limited effectiveness of monetary policy during and after the financial crisis. However, the Fed did implement nonconventional policies such as quantitative easing, making choice C incorrect.

All of the Following Have Been Proposed as Explaining the Limited