Which Argument Was a Justification for Breaking with the Normal

question 255

Multiple Choice

Which argument was a justification for breaking with the normal presumption against using discretionary fiscal policy during the Great Recession?

• A) Monetary policy would not be effective because interest rates were so high.
• B) Crowding-out was not likely to be a problem in a very depressed economy with interest rates near zero.
• C) The economy was so depressed that a political business cycle was not likely to be a problem.
• D) Ricardian equivalence was likely if monetary policy was used alone.

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Definitions:

Self-Preservation

The instinct or behavior aimed at ensuring one's own safety and well-being, especially in response to threats.

Academic Perseverance

The sustained effort and persistence in pursuing and achieving educational goals despite challenges and obstacles.

Efficacy

The ability to produce a desired or intended result, often used in contexts relating to psychology, medicine, and organizational performance.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors.