The Fed's large purchases of mortgage-backed securities have ________ their prices and ________ mortgage interest rates.
A) increased; raised
B) increased; lowered
C) decreased; raised
D) decreased; lowered

Question

Quizplus · Accepted Answer

The Fed's large purchases of mortgage-backed securities have increased their prices and lowered mortgage interest rates. When the demand for mortgage-backed securities increases due to the Fed's purchases, their prices go up, which in turn leads to lower mortgage interest rates.

The Fed's Large Purchases of Mortgage-Backed Securities Have ________ Their