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Dynamic AD-AS Model: Monetary Policy
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Dynamic AD-AS Model: Monetary Policy
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25. Dynamic AD/AS Model / Dynamic AD-AS Model: Monetary Policy / Problem 3
Problem 3
Why might expansionary monetary policy be preferred over fiscal policy during a recession?
A
It reduces government spending, which helps balance the budget.
B
It is less effective than fiscal policy in boosting aggregate demand.
C
It can be implemented more quickly and directly affects interest rates.
D
It involves increasing taxes, which boosts government revenue.
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