Proponents argued that fiscal stimulus was appropriate after the 2008 financial crisis because:
A)austerity would only increase inflation and unemployment.
B)political instability in the Middle East was causing a depreciation of the euro and the dollar.
C)the lag associated with automatic stabilizers was too long.
D)the effectiveness of monetary policy was limited by the zero bound on interest rates.

Question

Quizplus · Accepted Answer

The effectiveness of monetary policy was limited by the zero bound on interest rates, making fiscal stimulus an appropriate option to stimulate the economy after the 2008 financial crisis.

Proponents Argued That Fiscal Stimulus Was Appropriate After the 2008