Because of the financial crisis

Question

Quizplus · Accepted Answer

All of the statements are correct in the context of a financial crisis. A) Aggregate demand typically plunges due to decreased consumer confidence and spending. B) The federal funds rate required to restore economic stability might need to be negative, but since nominal interest rates can't effectively go below zero, unconventional measures are needed. C) The Federal Reserve (Fed) uses tools like forward guidance and large-scale asset purchases to stimulate the economy when traditional monetary policy tools are insufficient, such as when the federal funds rate is at or near zero.

Because of the Financial Crisis