chapter 16.2 Flashcards
1
Q
The policy of quantitative easing aims at reducing the interest rate.
true
false
A
false
2
Q
Quantitative easing refers to
the change in the amount of money supply.
All of the above are correct.
lowering the reserve requirement for banks.
increasing the quantity of reserves through purchases of Treasury, mortgage, and other securities.
the Federal Reserve lowering the Fed Funds rate.
A
increasing the quantity of reserves through purchases of Treasury, mortgage, and other securities.
3
Q
A situation in which further increases in the money supply do not lower interest rates is known as:
a liquidity trap
quantitative easing
a Fed’s failure
the political business cycle
credit crunch
A
a liquidity trap
