Rather than using the purchase and sale of only government bonds in the conduct of open market operations,in 2008 the Fed also began buying and selling
A)stock options so it would be able to gain from the expected rebound in the stock market.
B)real estate in the Washington D.C.area.
C)corporate bonds,commercial paper,and mortgage-backed securities from commercial banks and other financial institutions.
D)future contracts for goods like grains,metals,and crude oil,which could be expected to increase in price substantially if the inflation rate rose rapidly in the future.

Question

Quizplus · Accepted Answer

In 2008, the Fed began buying and selling not only government bonds but also corporate bonds, commercial paper, and mortgage-backed securities from commercial banks and other financial institutions. This was done to provide additional liquidity to the financial system and stimulate economic growth. Option A, B, and D are incorrect because the Fed did not engage in these types of transactions as part of its open market operations.

Rather Than Using the Purchase and Sale of Only Government