The Nominal Interest Rate Cannot Fall Below Zero Because

question 8

Multiple Choice

The nominal interest rate cannot fall below zero because

• A) central banks are engaged in interest rate targeting.
• B) inflation is generally too high.
• C) inflation is generally too low.
• D) financial markets cannot allow for arbitrage opportunities.
• E) financial markets do allow for arbitrage opportunities.

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Definitions:

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A term referring to the global population collectively, emphasizing the interconnectedness and shared interests of people and nations around the world.