Monetary Policy Is More Effective at Closing an Expansionary Gap

Multiple Choice

Monetary policy is more effective at closing an expansionary gap than a recessionary gap because:

A) banks may be unwilling to lend and seeking more liquidity, thereby offsetting any expansionary policy.
B) households and firms make situations worse by borrowing too much from the excess reserves.
C) the implementation lag for an expansionary policy is longer than that for a contractionary policy.
D) most expansionary monetary policies get delayed due to several governmental regulations.
E) expansionary monetary policies aggravate the crowding-out effect that might render them ineffective.