Which of the Following Is a Difference Between "Quantitative Easing

question 396

Multiple Choice

Which of the following is a difference between "quantitative easing" and ordinary open-market operations?

• A) There is no difference between the two policy tools.
• B) Open-market operations are done to lower interest rates; quantitative easing is done to increase the quantity of bank reserves.
• C) Quantitative easing is done in order to lower interest rates; open-market operations are merely intended to increase bank reserves.
• D) Open-market operations involve forward commitment; quantitative easing is intentionally vague to maintain flexibility.