All of the following have been proposed as explaining the limited effectiveness of monetary policy during and after the Financial Crisis of 2007-2009 EXCEPT:
A)recessions accompanied by financial crises tend to be severe
B)a high level of uncertainty due in part to government policy
C)the reluctance of the Fed to implement nonconventional policies
D)structural changes as important sectors of the economy were deeply affected by the financial crisis

Question

Quizplus · Accepted Answer

A, B, and D have all been proposed as explanations for the limited effectiveness of monetary policy during and after the Financial Crisis of 2007-2009. However, the Fed did implement nonconventional policies such as quantitative easing and forward guidance, which have been seen as contributing to the slow recovery of the economy. Therefore, the reluctance of the Fed to implement nonconventional policies is not a proposed explanation for the limited effectiveness of monetary policy.

All of the Following Have Been Proposed as Explaining the Limited