After the 2008 Financial Crisis, Proponents of Austerity Argued That

question 129

Multiple Choice

After the 2008 financial crisis, proponents of austerity argued that fiscal stimulus was inappropriate because:

• A)cuts in government spending had increased interest rates.
• B)the increase in government spending had raised interest rates.
• C)unemployment remained high after the stimulus was implemented in 2009.
• D)monetary policy is more effective when the economy is close to the zero bound on interest rates.

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Definitions:

Market Value

The present cost at which a product or service is available for purchase or sale in an open market.

Corporations

are legal entities that are separate from their owners, providing limited liability protection, and have the ability to own assets, incur liabilities, and sell stock.

Special Purpose Equipment

Equipment that is designed and built for a specific task or function, which is not easily adaptable for other uses.

Common Stock

An equity security that denotes ownership within a corporation and grants the owner voting rights on company issues as well as eligibility to receive dividends.