At the end of 2008, the federal funds rate in the United States was close to zero. Which of the
Following is a major concern associated with such a low rate?
A) That traditional monetary policy will have no impact on the economy.
B) Such a low rate spurs excessive consumption and investment spending which may lead to inflation.
C) Such a low rate spurs excessive consumption and investment spending which may lead to deflation.
D) Economic agents might be unwilling to borrow in anticipation of even lower interest rates.
Correct Answer:
Verified
Q109: Use the following to answer questions .
Exhibit:
Q110: Use the following to answer questions .
Exhibit:
Q111: Use the following to answer questions .
Exhibit:
Q112: Use the following to answer questions .
Exhibit:
Q113: The rational expectations argument relies on
A) wages
Q115: The rational expectations hypothesis suggests that
A) people
Q116: Which of the following is an important
Q117: Use the following to answer questions .
Exhibit:
Q118: If nominal GDP = $900 billion and
Q119: What is velocity of money?
A) It is
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