When the Fed Is Changing the Quality of the Assets

question 56

Multiple Choice

When the Fed is changing the quality of the assets it holds, this is called:

• A)quantitative easing.
• B)operation twist.
• C)credit easing.
• D)precommitment policy.

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Definitions:

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, which can indicate the cost of living and inflation.

Variable Input

Inputs or resources whose quantity can be changed in the short term to adjust the level of output.

Wage Rate

The amount of compensation individuals receive per unit of time for their labor, often expressed per hour or year.

Profit-maximizing

The process or strategy by which a firm determines the price and output level that leads to the maximum profit.