The 2008 and 2009 Tax Cuts and the Increase in Government

Multiple Choice

The 2008 and 2009 tax cuts and the increase in government spending that occurred at the same time did not have the same inflationary impact as the similar policy in the 1960s because:

A) The fiscal stimulus came at a time when the economy was weakening due to other factors
B) Monetary policy makers, having perceived the inflation risk, responded appropriately
C) The timing was fortuitous
D) All of the answers provided are correct