Bonds cannot have yields below the effective lower bound because:
A. the banking technology does not exist to deal with negative yields.
B. the U.S. treasury guarantees all bonds to have a positive yield.
C. people can always hold cash.
D. all of the answers given are correct.
Answer: C
Economics
You might also like to view...
A judicial system for resolving disputes creates benefits even for people who never use it because
A) people are compelled to obey court decisions whether they want to or not. B) judicial decisions generate uniform rules, which everyone can count on. C) silence gives consent. D) the social contract entitles everyone to share in the benefits from goods produced by government.
Economics
Traders working for banks are subject to the
A) principal-agent problem. B) free-rider problem. C) double-jeopardy problem. D) exchange-risk problem.
Economics