True/False questions. Explanation determines the grade.

1. A major reason for the Great Recession was irresponsible fiscal policy before the crisis.

2. Quantitative easing is a policy aimed to lower short-term interest rates.

3. Available evidence from the Great Recession suggests that fiscal policy has a limited impact on economic activity.

4. During the Great Recession, inflation remained low because (at least partially) oil prices fell.

5. Raising an inflation target is potentially an effective way to stimulate aggregate demand.