Conventional monetary policy was limited during the 2008-2009 financial crisis because the central bank could not:

Question

Quizplus · Accepted Answer

During the 2008-2009 financial crisis, conventional monetary policy was limited because the target interest rate could not be reduced below zero. This is known as the zero lower bound, which means that once interest rates reach zero, there is little room for further conventional monetary policy stimulus.

Conventional Monetary Policy Was Limited During the 2008-2009 Financial Crisis