QUESTION

  • Since the end of the Great Recession, interest rates have been at historic lows—in 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?
  • how effective has the Fed’s policy been as a response to the Great Recession?

Public Answer

6XXGYN The First Answerer