If Interest Rates Are at the Zero Lower Bound

question 293

Multiple Choice

If interest rates are at the zero lower bound:

• A) the effectiveness of monetary policy increases.
• B) monetary policy is ineffective.
• C) automatic stabilizers don't work.
• D) monetary policy is more effective than fiscal policy.

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Definitions:

Occurrence

The fact or frequency of something happening.

Affected

Being influenced or changed by an external factor.

Probability

A measure of the likelihood or chance that a particular event will occur, expressed as a number between 0 and 1.

Mammals

Warm-blooded vertebrates characterized by the presence of mammary glands, which in females produce milk for feeding their young.