ECONOMICS
FEDERAL RESERVE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The US economy boomed in the 2010s.
|
|
|
The 2009 recovery was the fastest in US history.
|
|
|
The Federal Reserve has more than $4 trillion in private stocks and bonds, and is by far the largest US investor on Wall Street.
|
|
|
The US Congress has increased faith and trust in the wisdom of the Federal Reserve’s top officials.
|
Detailed explanation-1: -QE provides that additional stimulus by reducing long-term interest rates and increasing liquidity in financial markets. QE affects the federal budget through two channels: It changes net borrowing costs of the Treasury and the Federal Reserve. It stimulates economic activity, which affects other budgetary categories.
Detailed explanation-2: -As part of quantitative easing (QE), the Federal Reserve purchases Treasury securities from private investors.
Detailed explanation-3: -One of these tools is quantitative easing (QE ). QE is different from our normal policy actions because it allows us to more directly influence those longer-term interest rates that consumers and businesses pay. But the tool has the same objective as changing our policy rate-to achieve our inflation target.
Detailed explanation-4: -While QE had a profound effect on the money supply, however, it did not directly increase M1, which measures the supply of coins and bills in circulation, checking account deposits, and certain other instruments such as travelers’ checks.