Which of the Following Statements Is Most Accurate About the Fed's

question 156

Multiple Choice

Which of the following statements is most accurate about the Fed's zero interest rate policy (ZIRP) ?

• A) The Fed has abandoned the ZIRP, recognizing the need to reduce nominal interest rates to below zero.
• B) As of 2016, the ZIRP is being pursued by the Fed.
• C) It ended in late 2015, with the Fed increasing the IOER and engaging in reverse repo transactions.
• D) In an effort to end the ZIRP, the Fed prohibited nonbank lending to banks.

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Definitions:

Persistent

The quality of continuing steadfastly or firmly in a course of action in spite of difficulty or opposition.

Mental Models

Internal representations of external reality that people use to understand and interact with the world around them, influencing decision-making and behavior.

Social Approval

The affirmative recognition or endorsement from others within a social context, often influencing behavior and decisions.

Fundamental Issues

Basic or essential problems or questions that are at the core of a subject or situation.