Fiscal Policy Needs to Step Up If There's a Contraction: Sahm

Why is it important for fiscal policy to act quickly during economic contractions?

• To reduce government spending

• To make recessions shorter and less severe

• To increase inflation

• To increase interest rates

What is a limitation of the Federal Reserve during economic contractions?

• It can only lower interest rates

• It has real constraints on its effectiveness

• It can only provide support to businesses

• It can only increase taxes

What is a key advantage of fiscal policy over monetary policy?

• It can be more targeted

• It always reduces taxes

• It is controlled by the Federal Reserve

• It increases interest rates

In what way can fiscal policy be more effective than monetary policy?

• By being more blunt

• By focusing on long-term growth

• By always increasing spending

• By being more targeted

How can fiscal policy be applied during a pandemic like coronavirus?

• By reducing government intervention

• By providing direct financial support to affected individuals

• By increasing interest rates

• By focusing solely on macroeconomic indicators