Which of the Following Monetary Policy Tools Is More Effective

question 36

Multiple Choice

Which of the following monetary policy tools is more effective when the economy faces the interest rate zero-lower-bound problem?

• A)open market operation
• B)discount policy
• C)required reserve ratio
• D)the Fed's liquidity provision

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Definitions:

Merger

The combination of two or more companies into a single entity, where one survives and the others cease to exist.

Bankruptcy

A legal process by which individuals or other entities who cannot repay debts to creditors seek relief from some or all of their debts.

SEC

Securities and Exchange Commission, a U.S. government agency responsible for regulating the securities industry and protecting investors.

Consolidation Plan

A strategy for combining two or more companies into a single entity to achieve operational efficiencies or market benefits.