When an economy is in a deflationary spiral,and nominal interest rates are close to zero,it may be necessary:
A)for the Fed to print money.
B)for the Fed to buy financial securities.
C)to use fiscal stimulus.
D)all of the above
E)c and a

Question

Quizplus · Accepted Answer

In a deflationary spiral with near-zero nominal interest rates, traditional monetary policy becomes less effective. Therefore, the Fed may need to print money (quantitative easing), buy financial securities to inject liquidity, and fiscal stimulus may be necessary to boost demand and counteract deflation.

When an Economy Is in a Deflationary Spiral,and Nominal Interest