One Impact of the 2007-2009 Financial Crisis Was to Heighten

question 51

Multiple Choice

One impact of the 2007-2009 financial crisis was to heighten the challenges faced by monetary policymakers. All but which of the following was grew more prominent as a result of the crisis?

• A) Stock and property values have a tendency to go through boom and bust cycles.
• B) The nation's current account deficit keeps widening.
• C) Policymakers options are limited since the nominal interest rate cannot fall below the effective lower bound.
• D) The structures of the economy and financial system are constantly evolving.

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Definitions:

Lower Tail

The portion of a distribution of data or probability to the left of a specified value.

P-value

A measure in statistical hypothesis testing that helps determine the significance of the results.

Type II Error

Occurs when a statistical test fails to reject a false null hypothesis; also known as a false negative.