Can Coronavirus Response Open the Door to Modern Monetary Theory?

The video discusses the effectiveness of Fed cuts and the potential need for fiscal policies, especially in Europe where low rates may not stimulate lending. It explores possible fiscal responses, including tax cuts and non-traditional policies, amid global uncertainty. The impact of coronavirus on markets and investor sentiment is also highlighted, with expectations of worsening news before improvement.

What is one of the challenges of using lower interest rates to stimulate economic activity in Europe?

• It increases lending activity.

• It encourages more savings.

• It boosts profitability for banks.

• It impedes profitability for financial institutions.

Which economic theory suggests that central banks might need to finance fiscal policies?

• Keynesian Economics

• Modern Monetary Theory

• Classical Economics

• Supply-Side Economics

What fiscal measures are being considered in Europe to address economic challenges?

• Raising budget caps

• Implementing tax cuts or deferrals

• Increasing interest rates

• Reducing government spending

What is a significant factor affecting markets besides fiscal and monetary policies?

• Investor sentiment

• Government regulations

• Technological advancements

• Trade agreements

What is the expected short-term impact of the coronavirus pandemic on news flow?

• The news will have no impact.

• The news will improve immediately.

• The news will remain stable.

• The news will worsen before improving.