The Fed Bought Several Billion Dollars' Worth of U

question 248

Multiple Choice

The Fed bought several billion dollars' worth of U.S. government securities. The purpose of this action is to

• A) decrease the size of the national debt.
• B) improve its financial position by investing in relatively safe interest-earning assets.
• C) stimulate the economy by increasing the amount of money in circulation.
• D) drive up interest rates to cool off inflationary pressures.

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Definitions:

Standard Deviation

A statistical measure that quantifies the dispersion or variability of a set of data points or investment returns around their mean.

Expected Rate

Expected rate typically relates to the anticipated return or yield on an investment over a specific period.

Probability

A quantification of the chance that an event happens, represented by a numerical value ranging from 0 to 1.

Annual Returns

The percentage change in an investment's value over a one-year period, taking into account both capital gains and dividends.