Which of the Following Statements About Quantitative Easing Is Most

question 385

Multiple Choice

Which of the following statements about quantitative easing is most accurate?

• A) Quantitative easing refers to the Fed's use of open-market operations to buy trillions of dollars' worth of medium- and longer-maturity financial assets.
• B) Quantitative easing has become one of the permanently recognized tools of monetary policy.
• C) Quantitative easing significantly lowered interest rates in the aftermath of the financial crisis.
• D) Quantitative easing is the new official name for open-market operations.

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Definitions:

Legal Reserves

Funds that banks are legally required to hold in reserve against deposits made by their customers, either as cash in the bank or as deposits in the central bank.

Federal Reserve

The main bank system in the United States, tasked with managing the country's monetary policy, overseeing banking regulations, ensuring the financial system remains stable, and delivering financial services.

Liabilities

Financial obligations or debts owed by a person, company, or entity to others.

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.