Quantitative easing occurs when the:
A) Fed sells long-term securities.
B) Fed buys long-term securities.
C) government lowers income and other taxes.
D) government raises income and other taxes.

Question

Quizplus · Accepted Answer

Quantitative easing occurs when the Fed buys long-term securities to increase the money supply and encourage investment and lending. Selling long-term securities would have the opposite effect and decrease the money supply, which is not quantitative easing. Options C and D refer to changes in government fiscal policy, which are not related to quantitative easing.

Quantitative Easing Occurs When The