The response of monetary and fiscal policy to the 2008-2009 recession was motivated by
A) a desire to minimize the size of government.
B) the ideas of Prescott and Kydland.
C) Keynesian ideas.
D) fiscal austerity.
E) supply side economics.

Question

Quizplus · Accepted Answer

The response to the 2008-2009 recession was largely motivated by Keynesian ideas, which advocate for government intervention during times of recession in order to stimulate the economy. The use of both monetary policy (such as lowering interest rates and increasing the money supply) and fiscal policy (such as government spending and tax cuts) was aimed at boosting economic activity and reducing unemployment. The other choices (A, B, D, and E) are not accurate representations of the motivation behind the response to the recession.

The Response of Monetary and Fiscal Policy to the 2008-2009