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:

Explanatory Variables

Variables in a statistical model that are used to explain variations in the dependent variable; also known as independent variables.

Qualitative Predictor Variables

Variables that categorize or describe data based on attributes or qualities, such as gender, color, or type, which do not have a numerical value.

Dummy Variables

Numerical variables used in regression analysis to represent subgroups of the sample in a study.

Regression Model

A statistical technique that models and approximates the relationship between a dependent variable and one or more independent variables.