Once the federal funds rate hits zero, a central bank seeking to stimulate its economy further must turn to unconventional monetary policies.

Question

Quizplus · Accepted Answer

When the federal funds rate hits zero, a central bank has essentially exhausted its conventional monetary policy tools for stimulating the economy. In order to further stimulate the economy, the central bank must turn to unconventional monetary policies such as quantitative easing or negative interest rates.

Once the Federal Funds Rate Hits Zero, a Central Bank