Quantitative easing refers to the process whereby the Fed:
A) decreases the money supply to fight inflation.
B) raises interest rates to fight inflation.
C) buys securities to stimulate the economy.
D) sells securities to stimulate the economy

Question

Quizplus · Accepted Answer

Quantitative easing refers to the process of the Federal Reserve buying securities in order to stimulate the economy by increasing the money supply and lowering interest rates. This is typically done during times of economic downturn or recession to encourage borrowing and spending. Therefore, the correct answer is C, which states that the Fed buys securities to stimulate the economy.

Quantitative Easing Refers to the Process Whereby the Fed