Quantitative easing refers to a situation in which conventional monetary policy is ineffective in fighting an economic slump because nominal interest rates are up against the zero bound
a. True
b. False
Indicate whether the statement is true or false
False
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A trade deficit allows a country to:
A. produce more than it consumes. B. produce up to the level of desired consumption. C. consume more than it produces. D. consume up to the level of potential production.
The relationship between quantity supplied and price is usually
A. a direct relationship. B. an inverse relationship. C. a negative relationship. D. impossible to determine.
If the dollar is undervalued against the peso, it implies that:
A) quantity of dollar supplied in exchange of pesos equals the quantity of dollars demanded in exchange of pesos in the foreign exchange market. B) quantity supplied of dollar in exchange of pesos exceeds the quantity of dollars demanded in exchange of pesos in the foreign exchange market. C) the exchange rate between the dollar and the peso is flexible. D) quantity supplied of dollar in exchange of pesos is less than the quantity of dollars demanded in exchange of pesos in the foreign exchange market.
The Financial Services Modernization Act
A) effectively repealed the Glass-Steagall Act of 1933. B) increased restrictions on cross-ownership of different types of financial institutions. C) allowed mergers between commercial banks and investment banks, but not between commercial banks and insurance companies. D) All of the above.