The Federal Reserve's (the Fed's) policy of buying publicly held government debt with newly "printed" money in order to increase the amount of U.S. currency in circulation is an example of a ________ policy.

Question

Quizplus · Accepted Answer

The policy described in the question is an example of monetary policy. This is because it involves the manipulation of the money supply by the central bank (the Federal Reserve) in order to achieve macroeconomic goals such as price stability, full employment, and economic growth. In this case, the Fed is using open market operations (buying government debt) to increase the amount of money in circulation, which is one of the tools used in monetary policy.

The Federal Reserve's (The Fed's) Policy of Buying Publicly Held