Quantitative easing (QE) differs from open-market purchases in that QE shrinks the assets of the Fed, whereas open market purchases
expand the Fed's assets.

Question

Quizplus · Accepted Answer

Quantitative easing (QE) actually expands the assets of the Fed by purchasing long-term securities and increasing the size of their balance sheet. Open market purchases also expand the Fed's assets by purchasing securities, but QE is a specific type of open market purchase that focuses on longer-term securities.

Quantitative Easing (QE) Differs from Open-Market Purchases in That QE