Which argument was made in favour of using discretionary fiscal policy in fighting the Great Recession?
A) Monetary policy could not be effective,since interest rates were near zero.
B) If taxes were increased,the budget could be balanced.
C) If government spending decreased,the budget surplus would increase.
D) The lags associated with monetary policy would be destabilizing.

Question

Quizplus · Accepted Answer

The argument in favor of using discretionary fiscal policy during the Great Recession was that monetary policy would not be effective since interest rates were already near zero. This meant that there was little room for the Federal Reserve to cut rates further and stimulate the economy, and that fiscal policy could be more effective in providing the necessary stimulus.

Which Argument Was Made in Favour of Using Discretionary Fiscal