Author Question: What is the relationship between fiscal multipliers and the zero lower bound? A) Fiscal ... (Read 27 times)

plus1 · **on:** Jun 30, 2018

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.

Question 2

Between 1866 and 1914, statistical evidence suggests that many big businesses depended heavily on U.S. protectionist policies.

Indicate whether the statement is true or false