One factor limiting the Federal Reserve's ability to use monetary policy to stimulate the economy is that the Federal Reserve has

Question

Quizplus · Accepted Answer

The best choice is D because the Federal Reserve's tools to lower interest rates (such as open market operations and setting the federal funds rate) do not work effectively at interest rates below 0%. This limit is known as the "zero lower bound" and makes it difficult for the Fed to stimulate the economy during times of economic recession or crisis.

One Factor Limiting the Federal Reserve's Ability to Use Monetary