In Response to the Zero Lower Bound Problem

question 151

Multiple Choice

In response to the zero lower bound problem,

• A)the Fed implemented the zero interest rate policy (ZIRP).
• B)Congress approved additional fiscal stimulus in 2010.
• C)the Fed pursued quantitative easing.
• D)the Fed ended its forward commitment in order to encourage further lending.

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Definitions:

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together.

Equal Investment

A strategy where an investor allocates the same amount of money into each investment within a portfolio.

Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs).

Standard Deviation

A measure of the dispersion or spread of a set of values, indicating how much the values differ from the average of the set.