As a Result of the Financial Crisis, the Fed Has

question 148

Multiple Choice

As a result of the financial crisis, the Fed has begun buying securities in troubled markets, as it has been trying to provide more credit to the markets and thereby mitigate the crisis. This is known as

• A)Quantitative easing.
• B)FOMC.
• C)Credit crunching.
• D)Market deepening.
• E)Market thinning.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit.

Tax Expense

The total amount of taxes a company incurs on its taxable income, including federal, state, and local taxes.

Net Operating Income

A financial metric that calculates a company's profit after all operating expenses are subtracted from total revenue.

Residual Income

The net income an investment generates above a minimum required return.