Some European countries such as Ireland have difficulty closing recessionary gaps with expansionary macroeconomic policies because

Question

Quizplus · Accepted Answer

Countries like Ireland have limited fiscal flexibility due to their large budget deficits. This means that they are forced to pursue contractionary fiscal policies, which are not effective in closing recessionary gaps. Additionally, the European Central Bank sets fiscal policy for Eurozone countries, which further reduces the ability of individual countries to pursue expansionary policies.

Some European Countries Such as Ireland Have Difficulty Closing Recessionary