Bonds Cannot Have Yields Below the Effective Lower Bound Because

question 90

Multiple Choice

Bonds cannot have yields below the effective lower bound because:

• A) the U.S. treasury guarantees all bonds to have a positive yield.
• B) the banking technology does not exist to deal with negative yields.
• C) people can always hold cash.
• D) all of the answers given are correct.

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Definitions:

Total Utility

The total satisfaction or benefit that a consumer receives from consuming a particular quantity of goods or services.

Indifference Analysis

An economic tool used to analyze and understand consumer preferences, showing combinations of goods between which a consumer is indifferent.

Numerically Measurable

Quantifiable or able to be expressed in numerical terms and measured.

Convex

A shape where a line drawn between any two points on the structure will lie outside it, often used in economics to describe preference curves.