When the Fed Initiated a Program to Purchase Commercial Paper

question 12

Multiple Choice

When the Fed initiated a program to purchase commercial paper, one of its primary goals was to

• A)prevent financial institutions from holding commercial paper.
• B)require that financial institutions increase their holdings of commercial paper.
• C)increase activity in the market for commercial paper and boost the confidence of investors in commercial paper.
• D)prevent financial institutions from issuing commercial paper in the future.

---

Definitions:

Individual Liberty

The freedom of individuals to act as they choose, as long as they do not infringe on the equal rights of others, often considered a foundational aspect of democratic societies.

Formal Relations

Social connections and interactions that are governed by officially established rules and structures.

Informal Relations

Interactions and connections between individuals or groups that are not governed by formal rules, structures, or procedures, often based on personal or community ties.

Keynesian Economics

An economic theory proposed by John Maynard Keynes, suggesting that government intervention through public policies can influence macroeconomic productivity and stabilize economies.