Despite the fact that fiscal policy is not effective when dealing with recession,Canadian government conducted an expansionary fiscal policy in response to the 2008-2009 financial crisis and recession.What might explain best the rationale for this policy?
A)Since the U.S.did not conduct an expansionary fiscal policy,Canada had to do it.
B)Canada had a budget surplus and could afford to conduct an aggressive expansionary policy.
C)The muted response proved politically unpopular,and it was increasingly apparent that the recession was worldwide in scope,requiring a coordinated response internationally.
D)No other countries conducted an expansionary fiscal policy,so Canada had to do it.

Question

Quizplus · Accepted Answer

The political pressure to provide a response and the recognition that the recession was widespread and required a coordinated international response likely explains why Canada conducted an expansionary fiscal policy despite the limited effectiveness of such policies in dealing with recessions.

Despite the Fact That Fiscal Policy Is Not Effective When