Which of the following measures by the Federal Reserve led to an increase in bank reserves between 2009 and 2013?
A)Moral Suasion
B)Open market operations
C)Haircut
D)Quantitative easing

Question

Quizplus · Accepted Answer

Quantitative easing is a monetary policy tool used by the Federal Reserve to increase the money supply by buying securities from banks and other financial institutions, which in turn increases their reserves. This was a major policy measure used by the Federal Reserve between 2009 and 2013 to increase bank reserves. Moral suasion refers to the persuasive techniques used by central banks to influence the behavior of banks and other financial institutions. Open market operations involve the purchase or sale of government securities in the open market in order to influence the money supply. Haircut refers to the reduction in value of an asset used as collateral for a loan.

Which of the Following Measures by the Federal Reserve Led