When the Fed Embarked on a Policy Known as Quantitative

question 53

Multiple Choice

When the Fed embarked on a policy known as quantitative easing,they

• A)slowly lowered the federal funds rate target until it was equal to zero.
• B)reduced the required reserve ratio by one-quarter point per month for 12 months.
• C)bought longer-term securities than are usually bought in open market operations.
• D)opened up lending to primary dealers,commercial banks,and investment banks.

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Definitions:

Slope

In mathematics, the measure of the steepness or incline of a line, typically described as the ratio of the rise over the run.

Substitution Effect

The economic principle that describes how consumers react to changes in price by replacing more expensive items with less costly alternatives.

Oranges

A citrus fruit known for its sweet taste and high vitamin C content, often consumed fresh, juiced, or used in cooking and baking.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.