At the Zero Lower Bound

question 31

Multiple Choice

At the zero lower bound

• A) monetary policy has the usual effects.
• B) conventional monetary policy is all that works.
• C) government spending has no effects.
• D) open market purchases of government bonds by the central bank have no effects.
• E) consumption goes to zero.

---

Definitions:

Actual Costs

The real costs incurred in the production, acquisition, or other activities of a business, as opposed to estimated or budgeted costs.

Standard Costs

An accounting practice where predetermined costs are used for calculating the cost of production, often for budgeting and performance evaluation purposes.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit of material.

Actual Costs

Expenditures that a company incurs, as opposed to estimations or budgeted amounts.