In 2008, the expansive monetary policy used by the Fed was ineffective against t

Question

In 2008, the expansive monetary policy used by the Fed was ineffective against the economic contraction due to A. The crowding out effect of private investment B. It fell in a liquidity trap due to great uncertainty C. The rise in price levels D. All of the above In 2008, the expansive monetary policy used by the Fed was ineffective against the economic contraction due to A. The crowding out effect of private investment B. It fell in a liquidity trap due to great uncertainty C. The rise in price levels D. All of the above A. The crowding out effect of private investment B. It fell in a liquidity trap due to great uncertainty C. The rise in price levels D. All of the above

Explanation / Answer

Ans

B is right answer. Due to lower expectations the situation almost reached to liquidity trap. Hence monetary policy couldn't stimulate economy

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