The Fed Purchases of Long-Term Assets to Stabilize Financial Markets,reduce

question 124

Multiple Choice

The Fed purchases of long-term assets to stabilize financial markets,reduce long-term interest rates,and improve the investment environment are called:

• A)structural adjustments.
• B)financial strengthening.
• C)quantitative easing.
• D)inflation targeting.
• E)stress testing.

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Definitions:

Effective Annual Rate

The interest rate on an investment or loan on an annual basis, taking compounding into account.

Compounded Continuously

A method of calculating interest where the frequency of compounding is infinitely small, effectively occurring every moment, leading to exponential growth.

Stated Rate

The interest rate declared on a financial instrument, such as a bond or loan, without adjusting for compounding or fees.

Compounded Annually

A method of calculating interest where the interest earned or paid is added to the principal, resulting in interest on interest in subsequent periods.