In Terms of the Mechanics of Quantitative Easing

question 370

Multiple Choice

In terms of the mechanics of quantitative easing,

• A) quantitative easing formally changes interest rates; open-market operations only influence rates.
• B) it works the same as open-market operations.
• C) it differs from open-market operations in that the securities purchases occur directly from households.
• D) it only changes the interest rate; it doesn't influence bank reserves.

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Definitions:

Paper Payable

A financial instrument or document that promises the payment of a specific amount of money either on demand or at a specified future date.

"On Demand"

Refers to the immediate availability or access to products, services, or financial transactions upon request.

Writing

The act of marking coherent words on a surface to communicate information, or the physical record of such words.

Negotiable

indicates that a financial instrument or document can be transferred from one party to another, often by endorsement or delivery, altering the holder in due course.