If the Federal Reserve purchases large amounts of long-term bonds in order to drive long-term interest rates down, this is evidence of:
A)undue influence by the political process.
B)fiscal policy.
C)forward guidance.
D)quantitative easing.

Question

Quizplus · Accepted Answer

Quantitative easing involves the purchase of large amounts of long-term bonds by the central bank in order to lower long-term interest rates and stimulate economic growth. This is often done during times of low inflation and weak economic activity.

If the Federal Reserve Purchases Large Amounts of Long-Term Bonds