When the Fed Lowers the Nominal Interest Rate to Zero $- \pi _ { t }$

question 26

Multiple Choice

When the Fed lowers the nominal interest rate to zero, what is the real interest rate?

• A) \(- \pi _ { t }\)
• B) \(i _ { t } - \pi _ { t }\)
• C) zero
• D) equal to the nominal interest rate
• E) undetermined

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