Question

the zero lower bound for interest rates refers to: the fact that interest rates can't go below zero. a theory that says that interest rates should have no bounds or limits. a law that prohibits credit unions from paying interest on checkable deposits. the fact that there is no lower bound for interest rates.

Answer 1

The zero lower bound for interest rates refers to the fact that there is no lower bound for interest rates. Hence, option D is correct.

What are interest rates?

An interest rate provides information on how costly borrowing is or how profitable saving is. As a result, the amount you pay for borrowing money, stated as a percentage of the total loan amount, is the interest rate if you are a borrower.

The rate informs you of the precise amount of interest you will earn or pay on a loan. For instance, $6 would be the interest on a $100 loan at a nominal interest rate of 6%. The interest rate does not change as the loan's size increases. The interest rate would stay at 6% even if the borrower took out a $1,000 loan.

Thus, option D is correct.

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