The Fed's response to the zero lower bound problem was
A) to raise the lower bound.
B) quantitative easing.
C) to lower the reserve ratio.
D) restrictive monetary policy.

Question

Quizplus · Accepted Answer

The Fed's response to the zero lower bound problem was to implement quantitative easing, which involves increasing the money supply and purchasing government securities to lower interest rates and stimulate the economy. This was seen as an alternative to lowering interest rates, which couldn't go below zero, and allowed for further monetary policy actions.

The Fed's Response to the Zero Lower Bound Problem Was