Answer whether the following statements are true or false with a 3-4 line explanation for each: a) It is always optimal for a government to decrease its debt to GDP ratio. b) If the policy rate is at the zero lower bound, fiscal policy cannot be used to stimulate the economy. c) Quantitative easing and forward guidance are two policies that are primarily used when the policy rate is at the zero lower bound.
Answer whether the following statements are true or false with a 3-4 line explanation for each: a) It is always optimal for a government to decrease its debt to GDP ratio. b) If the policy rate is at the zero lower bound, fiscal policy cannot be used to stimulate the economy. c) Quantitative easing and forward guidance are two policies that are primarily used when the policy rate is at the zero lower bound.
Chapter21: Fiscal Policy
Section: Chapter Questions
Problem 3SQP
Related questions
Question
Answer whether the following statements are true or false with a 3-4 line explanation for each:
a) It is always optimal for a government to decrease its debt to
b) If the policy rate is at the zero lower bound, fiscal policy cannot be used to stimulate the economy.
c) Quantitative easing and forward guidance are two policies that are primarily used when the policy rate is at the zero lower bound.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning