Which 2009 condition limited the Federal Reserve's options in the use of traditional expansionary monetary policy?
A) Open market operations had previously failed.
B) The Great Recession had ended.
C) The federal funds rate was already at 0 percent.
D) Inflation was rising at an unexpected rate.
E) The Great Recession was worsening.

Question

Quizplus · Accepted Answer

If the federal funds rate is already at 0 percent, the Federal Reserve cannot lower interest rates any further through traditional expansionary monetary policy. This is known as the zero lower bound, and it limits the options available to the Fed in stimulating the economy.

Which 2009 Condition Limited the Federal Reserve's Options in the Use