Quantitative easing is likely to lead to a(n)________ in the economy.
A) increase in the federal funds rate
B) decrease in the interest rate on long-term bonds
C) increase in the unemployment rate
D) decrease in the price level

Question

Quizplus · Accepted Answer

Quantitative easing involves the central bank purchasing long-term bonds, which helps to increase the demand for these bonds and push down their interest rates. This, in turn, can lead to lower overall interest rates in the economy, which can stimulate borrowing and spending.

Quantitative Easing Is Likely to Lead to A(n)________ in the Economy