In response to the zero lower bound problem,
A)the Fed implemented the zero interest rate policy (ZIRP).
B)Congress approved additional fiscal stimulus in 2010.
C)the Fed pursued quantitative easing.
D)the Fed ended its forward commitment in order to encourage further lending.

Question

Quizplus · Accepted Answer

The Fed pursued quantitative easing to address the zero lower bound problem, which occurs when interest rates are near zero and the central bank can no longer stimulate the economy through traditional monetary policy tools.

In Response to the Zero Lower Bound Problem