When the Central Bank Pursues a Policy of Quantitative Easing,it

question 274

Multiple Choice

When the central bank pursues a policy of quantitative easing,it:

• A) is trying to increase interest rates.
• B) is trying to decrease inflation.
• C) purchases short-term government securities.
• D) purchases long-term debt whose interest rates are significantly above zero.

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Definitions:

Accrued Interest

Accrued interest is interest that has been incurred but not yet paid, often relating to bonds or loans over the period between interest payment dates.

Equity Method

An accounting method in which the investment in common stock is initially recorded at cost, and the investment account is then adjusted annually to show the investor’s equity in the investee.

Stock Investments

Financial assets representing ownership in a company or corporation, typically traded on stock exchanges.

Debt Investments

Financial assets purchased with the expectation that the original funds will be returned over time with interest, typically including bonds or loans.