Multiple Choice
The zero lower bound on the nominal interest rate arises because
A) if the nominal interest rate were less than zero, an arbitrage opportunity would exist.
B) bank profits must be zero.
C) the government would not allow it.
D) the economy would crash.
Correct Answer:
Verified
Correct Answer:
Verified
Q8: The money supply is<br>A) endogenous.<br>B) determined by
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Q10: When the nominal interest rate increases,the quantity
Q11: Going from M0 to M1 and to
Q12: Which of the following decreases money demand?<br>A)
Q14: In practice,money growth targeting was<br>A) a good
Q15: The nominal return of money is<br>A) 0.<br>B)
Q16: The real return on money is<br>A) 0.<br>B)
Q17: The classical dichotomy states that<br>A) money is
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