One Criticism of the Fed's Quantitative Easing Policy Is That

question 114

Multiple Choice

One criticism of the Fed's quantitative easing policy is that a prolonged period of low interest rates could lead to speculative bubbles.Some economists argued that as interest rates fell and prices of long-term Treasury bonds rose,financial markets were experiencing a "Treasury bubble." These economists worried that investors,banks,other financial firms,and pension funds were underestimating the likelihood that long-term interest rates would eventually ________,causing substantial ________ in the prices of Treasury bonds.

• A)rise; declines
• B)rise; increases
• C)fall; declines
• D)fall; increases

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Definitions:

Chemical Elements

Substances that cannot be chemically broken down into simpler substances and are the primary constituents of matter.

DNA

The molecule that encodes genetic information in the nucleus of cells, determining the structure, function, and behavior of living organisms.

Junk DNA

A term formerly used to describe portions of the DNA sequence that do not encode for proteins, though many such regions are now known to have regulatory functions.

Gene Function

The specific biological role or activity of a gene product (either RNA or protein), which can influence an organism's traits and is essential for understanding genetics and molecular biology.