Worries About the Zero Bound from 2002 to 2005 Led

question 41

Multiple Choice

Worries about the zero bound from 2002 to 2005 led the Fed to

• A)increase reserve requirements on banks.
• B)make more discount loans than usual.
• C)tighten monetary policy.
• D)keep the Federal funds rate below the inflation rate.

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Definitions:

Diverge

To move or extend in different directions from a common point, often used in reference to plate tectonics or paths.

Subducted Plate

A tectonic plate that is being forced downward into the mantle beneath another plate at a convergent boundary.

Continental Rifting

The process where a continental landmass breaks apart due to tectonic forces, often leading to the formation of new ocean basins.

Continent Intact

This term is unclear but may refer to a continent remaining geologically stable or undivided by significant natural events over time.