Which is an example of quantitative easing by the Federal Reserve?
A) The Fed purchases $100,000 worth of short-term government bonds.
B) The Fed purchases $50,000 worth of long-term government bonds.
C) The Fed raises the money multiplier.
D) The Fed lowers interest rates.

Question

Quizplus · Accepted Answer

Quantitative easing involves the purchase of long-term government bonds by the Federal Reserve to increase the money supply and stimulate economic growth. Option B represents such a purchase, while Option A is a short-term bond purchase that may not have the same effect. Option C (raising the money multiplier) and Option D (lowering interest rates) are also monetary policy tools used by the Fed, but they are not specifically examples of quantitative easing.

Which Is an Example of Quantitative Easing by the Federal