LEE'S PICK The Great Recession officially lasted from December 2007 to June 2009. But the effects lingered for several y

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LEE'S PICK The Great Recession officially lasted from December 2007 to June 2009. But the effects lingered for several years thereafter, with slow growth of real GDP and high unemployment rates. These effects all occurred despite several doses of expansionary monetary policy. Not only did the Fed push short- term interest rates to nearly 0%, but it also engaged in several rounds of quantitative easing, purchasing hundreds of billions of dollars' worth of long- term bonds.
Which of the following are possible reasons why monetary policy was not able to restore expansionary growth during and after the Great Recession? Which are not possible reasons? Items (4 items) (Drag and drop into the appropriate area below) Expansionary monetary policy could not keep up with the increase in long-run aggregate supply. Expansionary monetary policy is ineffective in the short run if it is expected. Expansionary monetary policy is ineffective in the long run. Expansionary monetary policy is ineffective in the short run if it is unexpected. REASONS Drag and drop here Categories NOT REASONS Drag and drop here.
Part 2 (1 point) See Hint Once the Fed had pushed short-term intererest rates to zero, it engaged in several rounds of quantitative easing, purchasing hundreds of billions of dollars' worth of long-term bonds, which would increase the supply of loanable funds. How was quantitative easing supposed to influence the economy? Choose one: O A. Quantitative easing would increase long-term interest rates, decrease investment spending, and decrease aggregate demand. O B. Quantitative easing would reduce long-term interest rates, stimulate investment spending, and increase aggregate demand. O C. Quantitative easing would reduce long-term interest rates, stimulate investment spending, and decrease aggregate demand. O D. Quantitative easing would reduce long-term interest rates, stimulate investment spending, and increase long-run aggregate supply.