In September 2012 the Fed Announced That It Would Buy

question 196

Multiple Choice

In September 2012 the Fed announced that it would buy $40 billion of mortgage backed securities per month. One goal of this policy was to ________ the price of these securities and thereby help ________.

• A) raise; prices of housing to fall to their new equilibrium
• B) raise; lower long-term interest rates
• C) lower; make the short-term interest rate more responsive to Fed actions
• D) raise; raise long-term interest rates

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Definitions:

Competence

The ability of an individual or organization to perform a task effectively, with the required skills and knowledge.

Goal-Setting Theory

A psychological theory that suggests specific and challenging goals along with appropriate feedback contribute to higher and better task performance.

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Goal Accomplishment

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