Quantitative easing differs from traditional open market operations by:
A) Involving purchasing very large amounts of securities from banks or the non-bank public for the purpose of increasing the money supply and providing a larger stimulus.
B) At times involving the purchase, such as with Operation Twist by the Fed long-term government securities and mortgage-backed securities to try to reduce long-term rates to encourage borrower by firms for capital projects to increase hiring and reduce unemployment.
C) Dramatically lowering the real interest rate in an economy.
D) All of the above.
Correct Answer:
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