Quantitative Easing Is When the Fed Engages in Purchasing Financial

question 144

True/False

Quantitative easing is when the Fed engages in purchasing financial assets from banks and other financial institutions with newly created money, resulting in larger bank excess reserves and increased money supply and liquidity.

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Definitions:

Cash Flow

The cumulative sum of funds moving into and out of a company, particularly influencing its liquid assets.

Opportunity Costs

The advantages that a person, business, or investor loses by selecting one option instead of another.

Sunk Costs

Past expenses that have already been incurred and cannot be recovered, and therefore should not affect future business decisions.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.