Quantitative Easing Occurs When the Central Bank

question 6

Multiple Choice

Quantitative easing occurs when the central bank

• A)increases its interest rate target.
• B)purchases long-term assets.
• C)performs a helicopter drop.
• D)purchases short-term assets.
• E)engages in open market operations.

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Definitions:

Eurodollars

U.S. dollars deposited in banks outside the United States, often used for international transactions.

Forward Trade

A financial agreement to buy or sell an asset at a predefined price on a specified future date, commonly used in foreign exchange and commodities markets.

Hong Kong Dollars

The officially recognized money in Hong Kong, known as HKD.

Forward Rate

The future interest rate agreed upon in a forward contract or derived from a forward curve, representing yield on a future investment period.