The policy of the Fed purchasing long-term assets to stabilize financial markets is called
A)controlling short-term interest rates
B)quantitative easing
C)regulating bank managers
D)controlling the money supply
E)qualitative easing

Question

Quizplus · Accepted Answer

The policy of the Fed purchasing long-term assets to stabilize financial markets is known as quantitative easing. This is done to increase the money supply and stimulate economic growth. Option A (controlling short-term interest rates) is a tool used by the Fed to manage the economy but is not specifically related to quantitative easing. Option C (regulating bank managers) and D (controlling the money supply) are also functions of the Fed but do not refer to quantitative easing. Option E (qualitative easing) is a similar but different policy where the central bank buys specific types of assets instead of just long-term ones.

The Policy of the Fed Purchasing Long-Term Assets to Stabilize