Which of the following is NOT a potential tool a central bank would have if the zero lower bound has been reached?
A) raising inflation expectations
B) quantitative easing
C) increasing the target inflation rate
D) increasing tax rates

Question

Quizplus · Accepted Answer

Increasing tax rates is a tool used by fiscal policy, which is controlled by the government, not the central bank. Therefore, it is not a potential tool a central bank would have if the zero lower bound has been reached.

Which of the Following Is NOT a Potential Tool a Central