(Last Word) Which of the Following Is a Concern About

question 283

Multiple Choice

(Last Word) Which of the following is a concern about a central bank going below the zero lower bound and setting negative interest rates to stimulate the economy?

• A)Depositors will withdraw their money, reducing the ability of banks to make loans.
• B)Negative interest rates promote financial uncertainty that reduces aggregate demand.
• C)Reduced spending will start a deflationary spiral.
• D)The weakening of the domestic currency would increase that nation's (or area's) trade deficit.

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Definitions:

Current Ratio

A financial metric indicating a firm's capacity to settle short-term debts, determined by dividing current assets by current liabilities.

Conceptual Framework

An underlying structure in accounting that outlines the objectives and fundamentals leading to consistent standards and financial reporting.

Qualitative Characteristic

A fundamental attribute that makes the information provided in financial statements useful to users.