The Zero Lower Bound for Interest Rates Is

question 292

Multiple Choice

The zero lower bound for interest rates is:

• A) the fact that interest rates can't go below zero.
• B) a theory that says that interest rates should have no bounds or limits.
• C) a law that prohibits credit unions from paying interest on chequable deposits.
• D) only a theory that never actually occurs in the real world.

---

Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate reflection of an economy's size and growth.

Price Index

A statistical estimate constructed to measure changes in the price level of a specific basket of goods and services over a period.

GDP Per Capita

A measure that divides the country's gross domestic product by its total population, indicating the average economic output per person.

Population

The total number of individuals inhabiting a particular area or country, including both the native and any transient groups.