When the Fed decided to buy long-term Treasury securities while selling an equal amount of shorter-term treasury securities to keep long-term interest rates low,it was following a strategy known as
A)securitization.
B)operation twist.
C)quantitative easing.
D)indirect finance.

Question

Quizplus · Accepted Answer

The strategy described is known as "operation twist," which is when the Federal Reserve buys long-term Treasury securities while selling an equal amount of shorter-term Treasury securities to keep long-term interest rates low. Securitization refers to the process of pooling together assets and creating securities backed by those assets, quantitative easing involves the purchase of financial assets such as bonds and securities to stimulate the economy, and indirect finance refers to financial intermediaries such as banks lending to borrowers.

When the Fed Decided to Buy Long-Term Treasury Securities While