Recall the Application about the Fed's policy of quantitative easing to answer the following question(s).
-Recall the Application. The Fed's goal of this policy was to ________ the prices of government bonds and mortgage securities and ________ the interest rates on both bonds and mortgages.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

The policy of quantitative easing involves the Fed buying government bonds and mortgage-backed securities from banks, thereby increasing the demand for these securities and driving up their prices. This results in a decrease in interest rates on these securities, which translates to lower mortgage rates for consumers and cheaper borrowing costs for businesses. Therefore, the Fed's goal was to increase the prices of government bonds and mortgage securities (which would decrease their yields) and decrease interest rates on both bonds and mortgages.

Recall the Application About the Fed's Policy of Quantitative Easing