When the United States Engaged in Quantitative Easing from 2008

question 8

Multiple Choice

When the United States engaged in quantitative easing from 2008 to 2014,why didn't the money supply rise sharply?

• A)Foreigners wanted all the new dollars created by the Federal Reserve.
• B)Banks held the increased monetary base as excess reserves.
• C)The Fed offset the increased monetary base by raising reserve requirements.
• D)The Fed offset the increased monetary base by buying foreign currency.

---

Definitions:

Net Income

The total profit of a company after all expenses, including taxes and costs, have been deducted from total revenue.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Premium on Bonds Payable

The amount by which a bond's selling price exceeds its face value.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, which can include payments on debts, loans, or credit lines.