Given the zero lower bound on the nominal rate,the lowest real interest rate the central bank can achieve is
A)- $ \pi^{\mathrm{e}} $
B) $ \pi^{\mathrm{e}} $
C)0)
D)i)

Name: Given the zero lower bound on the nominal rate,the lowest real interest rate the central bank can achieve is A)- $ \pi^{\mathrm{e}} $ B) $ \pi^{\mathrm{e}} $ C)0) D)i)
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Question

Quizplus · Accepted Answer

The lowest real interest rate the central bank can achieve is - $ \pi^{\mathrm{e}} $ because the nominal rate cannot be negative.

Given the Zero Lower Bound on the Nominal Rate,the Lowest πe \pi^{\mathrm{e}} πe

Given the Zero Lower Bound on the Nominal Rate,the Lowest $\pi^{\mathrm{e}}$