When the Fed lowered short-term interest rates to near zero but the policy didn't seem to stimulate the economy enough, the Fed in 2009 also began conducting the policy of expansive buying of bonds now known as:
A) ZIRP (zero interest rate policy)
B) QE (quantitative easing)
C) Operation Twist
D) Zero Lower Bound

Question

Quizplus · Accepted Answer

The policy of expansive buying of bonds, which was adopted by the Fed in 2009, is known as quantitative easing (QE). Option A, ZIRP (zero interest rate policy), refers to the Fed's policy of setting the short-term interest rates close to zero. Option C, Operation Twist, is a monetary policy tool used by the Fed to influence long-term interest rates by twisting the yield curve. Option D, Zero Lower Bound, refers to the lowest possible interest rate that the Fed can set.

When the Fed Lowered Short-Term Interest Rates to near Zero