When the Federal Reserve conducts open market purchases to increase bank reserves without trying to alter the interest rate that is already close to zero, the policy action is called

Question

Quizplus · Accepted Answer

The policy action described is quantitative easing, which involves the central bank purchasing securities to increase bank reserves and stimulate economic growth when interest rates are already low. Qualitative easing and tightening involve changing the composition of the central bank's balance sheet, while quantitative tightening involves reducing bank reserves and draining liquidity from the financial system.

When the Federal Reserve Conducts Open Market Purchases to Increase