What Are Options for Monetary Easing Using Interest Rate Policy

question 59

Multiple Choice

What are options for monetary easing using interest rate policy instruments when the rate has hit the zero lower bound?

• A) At that point, interest rate policy cannot be used.
• B) Monetary easing can still occur whenever interest rates are greater than zero at the retail level.
• C) The central bank can increase the money supply, and interest rates can be less than zero.
• D) Borrowing can be stimulated in ways other than lower rates of interest.

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Definitions:

Caste System

The Caste System is a form of social stratification defined by hereditary status, often seen in India, where individuals' occupations and social connections are heavily influenced by their caste.

Social Mobility

The ability for individuals or groups to move within the social hierarchy, including upward and downward mobility, which reflects changes in wealth, occupation, education, or social status.

Closed System

A social system with very little opportunity to move from one class to another.

Structural Mobility

Changes in the social status of large numbers of people as a result of structural changes in society.