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.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter21: Fiscal Policy

Section: Chapter Questions

Problem 3SQP

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