The term "quantitative easing" refers to a policy by the Fed to
A)massively buy long-term assets in order to directly lower long-term interest rates
B) massively sell short-term assets in order to quickly change short-term interest rates
C) directly appeal to banks to ease credit in order to stimulate investment spending
D)"peg" the interest rate at a pre-determined level through the use of open market operations
E)none of the above

Question

Quizplus · Accepted Answer

Quantitative easing involves the Fed purchasing large quantities of long-term assets (such as government bonds and mortgage-backed securities) in order to increase the money supply, lower long-term interest rates, and stimulate borrowing and investment.

The Term "Quantitative Easing" Refers to a Policy by the Fed