Quantitative easing
A)is an open market sale of securities by the U.S. Federal Reserve.
B)is an open market purchase of securities by the U.S. Federal Reserve.
C)decreases bank reserves.
D)raises the nominal interest rate.
E)is an open market purchase of securities by Congress.

Question

Quizplus · Accepted Answer

Quantitative easing is an expansionary monetary policy where the central bank, such as the U.S. Federal Reserve, purchases government bonds or other financial assets from commercial banks and other private institutions. This action increases the money supply, reduces interest rates, and injects liquidity into the economy. Therefore, choice B is the correct answer.

Quantitative Easing