An article in the Economist magazine observed that when the Fed’s “policy rate is effectively zero and long-term rates are close to all-time record lows. . . . [doesn’t] additional easing amount to little more than pushing on a string?”

a. What is the Fed’s “policy rate”?

b. What does the author mean by “additional easing”?

c. Why does the article describe additional easing as “pushing on a string”?

d. With short-term interest rates at or near zero and long-term interest rates at historic lows, do you think that additional quantitative easing by the Fed would amount to little more than pushing on a string? Briefly explain.