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When the Fed Lowers the Nominal Interest Rate to Zero πt- \pi _ { t }

Question 26

Multiple Choice

When the Fed lowers the nominal interest rate to zero, what is the real interest rate?


A) πt- \pi _ { t }
B) itπti _ { t } - \pi _ { t }
C) zero
D) equal to the nominal interest rate
E) undetermined

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