During the financial crisis of 2007-2008, the U.S. central bank lowered its policy rate from 5.25% to 0%. What was the effect on market rates of interest?
a. Market rates increased by 5%.
b. Market rates fell by 5%.
c. Market rates fell below zero.
d. Market rates barely moved at all.
Ans: d. Market rates barely moved at all.
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What will be an ideal response?
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