Which of the following is not correct about quantitative easing?
A)It is one of the conventional monetary policy tools.
B)It refers to the Fed's asset purchasing program.
C)It helped reduce term premium on long-term government bonds.
D)As a result, the balance sheet of the Fed is much larger than it was before the crisis.

Question

Quizplus · Accepted Answer

Quantitative easing is not one of the conventional monetary policy tools, but rather an unconventional tool that was utilized during the financial crisis of 2008. Conventional tools include adjusting the federal funds rate and reserve requirements.

Which of the Following Is Not Correct About Quantitative Easing