1. Zero lower bound refers to: a. level below which the Fed cannot further reduce short-term interest rates b. a bank with zero excess reserves c. a situation where there is little to no inflation 2. What two variables are related by the aggregate demand (AD) curve? 3. True or False: Stagflation is a combination of deflation and expansion. 4. What is disinflation? a. negative inflation rate b. the same as hyperinflation c. a substantial reduction in the rate of inflation