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Which one of the following statements is incorrect regarding the Zero Lower Bound (ZLB)? The ZLB imposes a constraint on the effectiveness of the monetary
Which one of the following statements is incorrect regarding the Zero Lower Bound (ZLB)? The ZLB imposes a constraint on the effectiveness of the monetary policy. The ZLB is likely to occur in a severe recession. All of the answers here are incorrect. The ZLB is reached when the real interest rate is at 0%. Inflation expectation determines the real interest rate when the ZLB is reached.
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