In the Keynesian model,the difference between using monetary and fiscal policy to eliminate a recession is that
A)monetary policy will eliminate a recession quicker than fiscal policy will.
B)fiscal policy will eliminate a recession quicker than monetary policy will.
C)an expansionary monetary policy will leave the economy with a lower real interest rate than an expansionary fiscal policy.
D)an expansionary fiscal policy will leave the economy with a lower real interest rate than an expansionary monetary policy.

Question

Quizplus · Accepted Answer

An expansionary monetary policy typically lowers interest rates to increase borrowing and spending, which can stimulate economic growth. In contrast, expansionary fiscal policy, through increased government spending or tax cuts, does not directly target interest rates and may not lead to a decrease in real interest rates like monetary policy does.

In the Keynesian Model,the Difference Between Using Monetary and Fiscal