Quantitative easing is the:
A)purchase of large quantities of longer-term government bonds and other securities in an effort to drive down longer-term interest rates.
B)sale of both short-term and long-term government bonds by the government.
C)purchase of bonds by the Federal Reserve.
D)setting of the discount rate by the Federal Reserve in an effort to increase loans to the banking sector.

Question

Quizplus · Accepted Answer

Quantitative easing involves the purchase of large quantities of longer-term government bonds and other securities in an effort to drive down longer-term interest rates. This is done by injecting new money into the economy, which leads to increased demand for bonds and lowers their yields or interest rates. This makes borrowing cheaper, spurs consumer spending and business investment, and helps to boost economic growth.

Quantitative Easing Is The