QUESTION 5

When the COVID-19 pandemic hit the U.S. population in 2020, the economy entered a very deep recession that had to be countered by major fiscal and monetary policy responses. Which one of the following frameworks would have offered an optimal macroeconomic policy to follow in that situation?

a.Balanced budget laws.

b.Fiscal golden rule.

c.Constant growth rate rule for money supply.

d.Currency board with a fixed exchange rate.

e.None of the above.