Ask Question
20 September, 03:18

If expansionary policy produces high GDP and low unemployment, why wouldn't the Fed always use expansionary policy?

+1
Answers (1)
  1. 20 September, 07:09
    0
    There are limits to how long an expansion is successful.

    Explanation:

    Expansionist policies often lead to fake bubbles of market security where people invest more than they are comfortable with and a small slowdown can cause a market crash as they panic.

    This is because of expansionist policies being used for too long

    These policies are like a turbo get in that they are to be used in moderation because if one relies on them too often they can dis balance the economy by producing a lot of deficit in the reserves and also less governmental control.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “If expansionary policy produces high GDP and low unemployment, why wouldn't the Fed always use expansionary policy? ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers