Raising interest rates following the use of unconventional policy tools depend on

Question

Quizplus · Accepted Answer

Both the size and composition of the central bank's balance sheet and the toolbox available to the central bank play a role in determining whether or not interest rates should be raised following the use of unconventional policy tools. The central bank will need to consider the impact that its balance sheet may have on inflation and the broader economy, as well as the availability of a variety of tools to effectively manage interest rates in a way that supports its policy objectives. Ultimately, the decision to raise interest rates will depend on a number of factors, including the specific circumstances of the economy, the goals of the central bank, and the overall economic context in which monetary policy is being implemented.

Raising Interest Rates Following the Use of Unconventional Policy Tools