If the Fed implements a zero interest rate policy, it will:
A) cause the U.S. dollar to appreciate against foreign currencies from nations with positive interest rates.
B) be in the pursuit of lower inflation.
C) set real interest rates at or near zero.
D) set nominal interest rates at or near zero.

Question

Quizplus · Accepted Answer

A zero interest rate policy involves setting nominal interest rates at or near zero to stimulate economic activity by making borrowing cheaper.

If the Fed Implements a Zero Interest Rate Policy, It