Some European Countries Such as Ireland Have Difficulty Closing Recessionary

Multiple Choice

Some European countries such as Ireland have difficulty closing recessionary gaps with expansionary macroeconomic policies because

A) the exchange rate is too low.
B) reducing budget deficits has forced governments into contractionary fiscal policies.
C) the real-balances effect is not applicable during recessions.
D) fiscal policy is set by the European Central Bank.
E) their economies always moves towards the natural rate of unemployment.