Question

True or false: the government securities purchased by the federal reserve (“the fed”) in normal open-market operations have a longer term than the government bonds the fed purchases for quantitative easing.

Answer 1

The answer to this question is basically False because the government securities in normal open-market operation have a short-term interest rate than the long term interest rate of government bond for quantitative easing. Quantitative easing only brought to play when the short-term interest goes down to zero.