At the End of 2013, the Fed Was Buying About

question 185

Multiple Choice

At the end of 2013, the Fed was buying about $100 billion of securities per month, a much higher amount than normal. These purchases would ________ the value of the dollar on foreign exchange markets thereby ________ U.S. exports.

• A) raise; increasing
• B) raise; decreasing
• C) lower; increasing
• D) lower; decreasing

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Definitions:

Compounded Quarterly

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan on a quarterly basis.

Loan

A sum of money that is borrowed, usually from a financial institution or individual, which is expected to be paid back with interest.

Payments

Transactions made by individuals or entities to fulfill obligations or to purchase goods and services.

Present Value

The immediate valuation of an upcoming sum of money or series of cash transactions, based on a given rate of return.