What do economists mean when they refer to the "size" of the Fed's balance sheet?
A)the size of the money supply it controls.
B)its ability to set fiscal policy.
C)its operating budget.
D)the sum of all the assets on its balance sheet.
E)its net worth.

Question

Quizplus · Accepted Answer

When economists refer to the "size" of the Fed's balance sheet, they are generally referring to the sum of all the assets on its balance sheet. This includes things like government bonds, mortgage-backed securities, and other assets that the Fed has purchased in order to inject liquidity into the economy. The size of the Fed's balance sheet is an important indicator of the level of intervention that the Fed is undertaking in the economy.

What Do Economists Mean When They Refer to the "Size