When the Fed increases the quantity of assets it owns,it is said to be engaging in
A)credit easing.
B)forward guidance.
C)quantitative easing.
D)a maturity extension program.

Question

Quizplus · Accepted Answer

When the Fed increases the quantity of assets it owns, it is engaging in quantitative easing. This involves the purchase of long-term government bonds and other securities in an effort to increase the money supply and spur economic growth. Credit easing involves targeting specific markets, such as the commercial paper market, to increase lending. Forward guidance refers to the Fed's communication about future monetary policy decisions. A maturity extension program involves selling short-term government securities and buying long-term ones to lower long-term interest rates.

When the Fed Increases the Quantity of Assets It Owns,it