Which of the following statements is most accurate about the Fed's attempt to normalize monetary policy after the Great Recession?
A)Normalization through raising the IOER and using reverse repos has occurred as planned.
B)Normalization has been hindered by the zero lower bound problem.
C)Nonbank lending to banks limits the potential of raising the IOER alone, but reverse repos are a way to soak up excess nonbank cash.
D)Increasing the IOER has been frustrated by nonbank use of reverse repos.

Question

Quizplus · Accepted Answer

Nonbank lending to banks limits the potential of raising the IOER alone, but reverse repos are a way to soak up excess nonbank cash, making this statement most accurate.

Which of the Following Statements Is Most Accurate About the Fed's