Under the policy of quantitative easing,the central bank _______________ in order to reduce interest rate spreads in credit markets during a financial panic.
A) creates central bank reserves for the purchase of financial assets
B) reduces central bank reserves by selling financial assets
C) purchases private-sector financial assets
D) purchases government bonds
E) prints more money.

Question

Quizplus · Accepted Answer

The central bank creates central bank reserves for the purchase of financial assets in order to reduce interest rate spreads in credit markets during a financial panic.

Under the Policy of Quantitative Easing,the Central Bank _______________ in Order