1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Mrrafil [7]
3 years ago
5

During the last half of 2008, the Fed seemed to take "baby steps" in reducing the federal-funds rate target, before finally lowe

ring it to zero. Why can't the Fed push the rate any lower than zero? Why do you think that the Fed was so seemingly reluctant to push the rate all the way to the floor?
Business
1 answer:
emmasim [6.3K]3 years ago
4 0

Answer:

Why can't the Fed push the rate any lower than zero?

Real interest rates can be lower than zero, or negative (because inflation rate is higher than interest rate), but nominal interest rates are generally only limited to zero. But during this same time, the European Central Bank actually started paying negative interest rates on money deposits and many European private banks followed. That means that they charged people for having their money on the bank.

Why do you think that the Fed was so seemingly reluctant to push the rate all the way to the floor?

The reason why the Fed was not willing to push the interest rates to zero or even below zero was that by doing so, the US dollar would have depreciated or lost value. In Europe this was done to encourage people to spend their money and not save as much, but in the US that is not really a problem. Generally in the US the problem is that people spend too much and save too little, but on some European countries and Japan, people tend to save too much. For example in Japan the national savings rate fluctuates between 22-40%, while the maximum savings rate in the US has been 10.4% in 1960, it currently is around 7.6%.

You might be interested in
Using PPS sampling, determine the sample size that you want to use for sending accounts receivable confirmations. Draw on the in
8_murik_8 [283]

Answer:

The below solution will guide your believe of what should be appropriate qualitative assumptions for inherent risk.

Explanation:

4 0
3 years ago
Which act prohibits banks from treating people differently based on race, origin, marital status, or age?
Serjik [45]

Answer:C.

Explanation:

4 0
2 years ago
The expansionary phase of the business cycle is characterized by
Leokris [45]

Answer:

<u>increasing real output and reducing unemployment</u>

Explanation:

The expansionary phase of the cycle is business characterized by the i<em><u>ncreasing real output and reducing unemployment.</u></em>

<em> Business cycle refers to that cycle in which there is increase and decrease or fall and rise of output of goods and services.</em>

<em> Business cycle has main four stages expansion ,peak , contraction and trough.</em>

The main cause of business cycle is the forces of supply and demand , expectation of future and it availability of the capability may also cause the business cycle.

Economic cycle is another name of Business cycle . Business cycle plays a crucial rule in the economy as it influence the demand of the consumer.

4 0
2 years ago
Publix has 2,700 pounds of bananas with a total cost of $864. Because the bananas have become too ripe, Publix is contemplating
tamaranim1 [39]

Answer: an increment in profit $1615

Explanation:

2700 pounds of Banana

Total cost = $864

If sold = $1485

When converted into bread $2565 and sold at the cost of $4480

Oven rentage = $300

What is the incremental effect on income if Publix converts the bananas to banana bread?

Sales Amount - Expenses incurred

= $4480 - $2565 + $300

= $4480 - $2865

= $1615

If he had sold the bananas

Sales amount - cost amount

= $1485 - $864

= $621

By converting the bananas to bread the incremental effect on income is it would yield more profits at $1615 compared to when sold at which is $621

3 0
3 years ago
If you put money into a compound interest account with 7.2% interest rate how many years will it take to double your money?
Firlakuza [10]

Answer:

It would take 2 years

Explanation:

7x2=14 witch is the 7.2% interest rate so it would take two years 2 double your money

4 0
2 years ago
Other questions:
  • As brett prepares to open his new business, he has identified the tasks that need to be accomplished and has assigned employees
    12·1 answer
  • Modern Railways Co. operates a cargo railroad service between New York and Boston. A train owned by Modern Railways derails due
    14·1 answer
  • "A drink costs 2 dollars. A taco costs 3 dollars. Given the number of each, compute total cost and assign totalCost with the res
    12·1 answer
  • Sylas is studying financial planning in one of his classes. his teacher has assigned him to create a timeline of his financial f
    13·1 answer
  • "Alan Meer inherits a hotel from his grandmother, Mary, on February 11 of the current year. Mary bought the hotel for $730,000 t
    6·1 answer
  • Which of the following would be considered an appraisal cost of quality?
    10·1 answer
  • Which of the following is NOT considered a trend in marketing?
    9·1 answer
  • What is the main reason why you need a financial reserve?
    15·1 answer
  • Bob returns goods bought on credit from Tariq, which ledger a/c entries record this in Tariq's book?
    7·2 answers
  • what is typically included in the reviewing stage of writing an effective business message? multiple choice setting a positive a
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!