If Short-Term Interest Rates Hit the Lower Zero Bound and the Fed

question 44

Multiple Choice

If short-term interest rates hit the lower zero bound and the Fed buys a large quantity of long-term assets to reduce long-term interest rates directly, the Fed is employing

• A)a zero lower bound policy
• B)a federal funds policy
• C)a policy of monetary transmission
• D)a policy of quantitative easing
• E)anticipatory monetary policy

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