The Fed's Open Market Operations Normally Involve Only the Purchase

question 93

Multiple Choice

The Fed's open market operations normally involve only the purchase of government securities,particularly those that are short-term. However,during the crisis,the Fed started new programs to purchase

• A)mortgage-backed securities and long-term Treasuries.
• B)mortgage-backed securities and Treasury bills.
• C)commercial papers and short-term Treasuries.
• D)Treasury bills and Treasury notes.

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Definitions:

Coercive Power

A form of authority based on the ability to deliver sanctions or punishments to those who do not comply with demands or expectations.

Channel

In marketing, the method or route through which a product or service is delivered to customers, including direct and indirect ways.

Break-even Analysis

A calculation to determine the point at which revenue received equals the costs associated with receiving the revenue, indicating no net loss or gain.

Cost-plus Pricing

A pricing strategy where the selling price is determined by adding a specific markup to a product's unit cost.