Since the end of the Great Recession, interest rates have been at historic lowsin some cases, close
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Question:
- Since the end of the Great Recession, interest rates have been at historic lowsin some cases, close to zero. How is expansionary monetary policy, or more specifically a open market purchase, supposed to work? How do near-zero interest rates limit the ability of expansionary monetary policy to work?
- How has the Fed responded to this quandary? That is, what policies has the Fed conducted?
- In your opinion, how effective has the Fed's policy been as a response to the Great Recession? What evidence can you suggest to support your position?
- Given the state of the economy and the causes of that statethink back to earlier discussions about the current economywhat should be the appropriate mix of fiscal and monetary policy, from a Keynesian perspective? From a neoclassical perspective? Which makes the most sense to you? Provide evidence (include and least one link/citation) to provide support to your conclusion.
Thank you
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