Negative Nominal Interest Rates

question 64

Multiple Choice

Negative nominal interest rates

• A)cannot happen because of the zero lower bound.
• B)can be implemented because the effective lower bound is negative.
• C)are not unconventional monetary policy.
• D)will reduce investment.
• E)are part of conventional monetary policy.

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Definitions:

Black Market

An illegal trade of goods or services that violates governmental regulations, often to avoid taxes or because the goods are prohibited.

Duty of Loyalty

The legal obligation of fiduciaries to act in the best interests of their beneficiaries or the entity they serve.

Right of First Refusal

A contractual right that gives its holder the option to enter a business transaction with the owner of something, before the owner is entitled to enter into that transaction with a third party.

Watered Stock

Shares that are issued by a company at a value much greater than its actual assets, typically leading to an inflated market value.