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Which of the following are reasons why stimulative monetary policy might fail? Check all that apply. Due to a weak economy and uncertainty about job
Which of the following are reasons why stimulative monetary policy might fail? Check all that apply. Due to a weak economy and uncertainty about job security, individuals may still be unwilling to take on loans despite low interest rates, offsetting the intended effects of the monetary policy. The indicators of a weak economy were identified too late. Businesses and households recognize that the stimulative monetary policy will result in higher inflation, so they borrow and make planned expenditures prior to the price increase, offsetting the effects of the policy. Businesses and households recognize that the stimulative monetary policy will result in higher inflation but don't adjust their borrowing and spending habits until after the price increase
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