18

23

With the policy rate at the effective lower bound, how might a central bank counter unwanted deflation? Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click the option twice to empty the box. Targeted asset purchases Increase the target federal funds range Forward guidance Quantitative easing Why might you expect the recovery from the 2007-2009 recession to be weaker than normal? Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click the option twice to empty the box. Tighter fiscal policies by governments due to rising deficits. Lower credit demand by households. Tighter lending standards by banks