In September 2012 the Fed announced that because of weak labor market conditions, it would ________ $40 billion of mortgage backed securities per month. Critics of the action said that banks have ________ excessive reserves so the action would be futile.

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In September 2012, the Federal Reserve announced it would buy $40 billion of mortgage-backed securities per month to stimulate the economy, a policy known as quantitative easing. Critics argued it would be ineffective because banks already had excessive reserves and might not lend more even with the increased liquidity.

In September 2012 the Fed Announced That Because of Weak