If the Target Federal Funds Rate Reaches the Lower Bound

question 83

Multiple Choice

If the target federal funds rate reaches the lower bound:

• A) the FOMC would run out of policy options.
• B) monetary policy would no longer be of use.
• C) the FOMC would turn to unconventional measures, such as forward guidance.
• D) the FOMC would simply reset the target.

---

Definitions:

Creatine Phosphate

An energy-storing compound in muscle cells.

Glycogen

A multibranched polysaccharide of glucose that serves as a form of energy storage in animals, fungi, and bacteria.

Skeletal System

The framework of bones and cartilages in the body, providing support, protecting internal organs, and facilitating movement.

Mechanical Forces

Physical actions that result in stress or strain upon an object or material, including pulling, pushing, twisting, and compression, significant in physics and engineering.