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:

Financial System

The set of processes and mechanisms that enable the transfer of money between savers, borrowers, and investors.

Federal Reserve

The central banking system of the United States, responsible for monetary policy and regulation of financial institutions.

State Banking Agencies

Governmental bodies at the state level that regulate and oversee banking institutions and their operations within that state.

Federal Comptroller

A government official responsible for supervising the quality and legality of financial and administrative operations in federal agencies.