Which of the following is likely to happen because of quantitative easing by the Fed?
A) A rightward shift of the demand curve for bank reserves
B) A leftward shift of the demand curve for bank reserves
C) A rightward shift of the supply curve of bank reserves
D) A leftward shift of the supply curve of bank reserves

Question

Quizplus · Accepted Answer

Quantitative easing involves the Fed purchasing assets such as government bonds, which increases the supply of bank reserves. Therefore, there would be a rightward shift of the supply curve of bank reserves.

Which of the Following Is Likely to Happen Because of Quantitative