If households and firms are pessimistic about the economy and very reluctant to increase investment and consumption during economic recessions even if interest rates fall, then Fiscal policy will be more effective than monetary policy Both fiscal and monetary policy will be equally effective Monetary policy will be more effective than fiscal policy

If households and firms are pessimistic about the economy and very reluctant to increase investment and consumption during economic recessions even if interest rates fall, then Fiscal policy will be more effective than monetary policy Both fiscal and monetary policy will be equally effective Monetary policy will be more effective than fiscal policy

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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