The Inability to Use Monetary Policy Because the Nominal Rate

question 54

Multiple Choice

The inability to use monetary policy because the nominal rate of interest cannot fall below zero is called:

• A) liquidity preference.
• B) money neutrality.
• C) liquidity trap.
• D) money illusion.

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Definitions:

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Methods or strategies implemented to regulate behavior and administer penalties for violations of laws or rules.

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