Purchasing long-term government bonds from private financial corporations for the purpose of changing the quality of assets held by the Fed is called:
A. operation twist.
B. quantitative easing.
C. credit easing.
D. precommitment policy.
Answer: C
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A federal deficit of $300 billion means that
A) the government plans on collecting $300 billion in taxes this year. B) the government has a total debt of $300 billion. C) the government is spending $300 billion a year more than it is collecting in taxes. D) government spending is $300 billion a year.
If nominal GDP = $15 trillion and the quantity of money is $3 trillion, what is the velocity of circulation?
A) 45 B) 18 C) 5 D) 12
In economics, what is the difference between the short run and the long run?
What will be an ideal response?
A system in which the value of currency issued by the government is based entirely on public faith that the currency will be acceptable in trade is
A) a fiduciary system. B) a private property system. C) a Gresham system. D) a socialistic system.