Question

In late 2008, the Fed purchased $300 billion in long-term Treasury securities and $1.25 trillion in mortgage-backed securities. What was the name given to these types of purchases

Answer 1

Answer:

Quantitative easing

Explanation:

Quantitative easing is a strategy that is used by governments to ease borrowing rates and encourage economic growth.

This is done by buying up long term securities in the economy thereby increasing money supply.

Cost of money is reduced, that is money can now be borrowed at a cheaper rate.

This is exemplified in this scenario where Fed purchased $300 billion in long-term Treasury securities and $1.25 trillion in mortgage-backed securities.