What Is the Relationship Between Fiscal Multipliers and the "Zero

question 86

Multiple Choice

What is the relationship between fiscal multipliers and the "zero lower bound"?

• A)Fiscal multipliers cannot fall below zero.
• B)When monetary policy has hit the zero lower bound,fiscal multipliers are likely to be larger than normal.
• C)At the zero lower bound,a fiscal contraction is actually expansionary.
• D)At the zero lower bound,fiscal policy works by shifting the aggregate supply curve,rather than shifting the aggregate demand curve.

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