When the Fed purchases _______, it is attempting to directly stimulate the housing market.
A)commercial paper
B)short-term Treasury securities
C)mortgage-backed securities
D)consumer loans

Question

Quizplus · Accepted Answer

When the Federal Reserve purchases mortgage-backed securities, it directly influences the housing market by lowering interest rates on mortgages, making borrowing cheaper for homebuyers. This action is intended to stimulate housing demand and, by extension, the broader economy.

When the Fed Purchases _______, It Is Attempting to Directly