Monetary Policy Can Have Substantial Effects on the Economy Even

question 85

Multiple Choice

Monetary policy can have substantial effects on the economy even when nominal interest rates are very low

• A) since real rates are what affect borrowing and spending decisions.
• B) by improving borrower and bank balance sheets.
• C) by reducing transactions costs.
• D) only when the policy is substantial.

---

Definitions:

Beeline

A straight, direct course or path taken by someone or something to reach a destination quickly.

Additional Business Capital

Extra funds that are invested in a business to fuel its growth, cover operational costs, or expand its operations.

Borrowing Funds

The act of obtaining money from another party, typically a financial institution, under the agreement to repay it, often with interest, at a later date.

Bringing in Partners

The process of adding one or more individuals as business partners, typically to share ownership, responsibilities, and benefits of operating a business.