If the Fed Initiates a Program to Purchase Long-Term Treasury

question 3

Multiple Choice

If the Fed initiates a program to purchase long-term Treasury securities, it is most likely attempting to

• A)reduce the rate on short-term Treasury securities.
• B)reduce the rate on commercial paper.
• C)reduce inflation.
• D)reduce long-term interest rates.

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Definitions:

Chapter 11

Chapter 11 refers to a section of the United States Bankruptcy Code that permits reorganization under the bankruptcy laws of the United States.

Chapter 7

A provision under the US Bankruptcy Code for the process of liquidation, where a debtor's assets are sold to pay off creditors.

Dischargeable

Pertaining to debts, a condition under which debts can be legally released or forgiven, often in the context of bankruptcy.

Hardship Discharge

A release from certain types of obligations or debts due to extreme financial difficulty, often in a bankruptcy context.