Question

why did quantitative easing in 2008 cause for....(looking for probable cause) - negative impact on long...

why did quantitative easing in 2008 cause for....(looking for probable cause)

- negative impact on long term and short term rates

- Impact on credit default swaps

- Impact on inflation expectations

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #2

Answer: 1st option

Quantitative easing:

This is the stimulus policy of the Federal Reserve in which an injection of money supply is done in the economy directly – suppose purchasing of government bonds from commercial banks.

This system is followed when the controlling of interest rates doesn’t work. Interest rates were almost 0% (zero) on 2008 but still borrowing didn’t increase, rather decreased. This was the negative impact, since people had negative future expectations. In order to ease, the central bank started purchasing government bonds for an increasing money supply in the economy.

answered by: anonymous
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
During a recession, monetary policy typically has an immediate impact via ... an increase of long...
During a recession, monetary policy typically has an immediate impact via ... an increase of long term interest rates. a reduction of long term interest rates. an increase of short term interest rates. a reduction of short term interest rates. a reduction of inflation expectations.
Central banks undertake Quantitative easing programs to​ ________. A. work around the problems that arise when​...
Central banks undertake Quantitative easing programs to​ ________. A. work around the problems that arise when​ short-term nominal interest rates approach zero. B. Lend money directly to private banks during financial crises C. more forcefully and directly impact long term interest rates relevant for investment decisions D. A and C only Which of the following statements is​ true? A. Countercyclical monetary policy slows down the growth rate of an economy during an expansion by shifting the labor supply curve to...
If the Federal Reserve did not regulate monetary policy, monitor banks and provide services for banks,...
If the Federal Reserve did not regulate monetary policy, monitor banks and provide services for banks, what would most likely be the economic conditions to transact business in the U.S.? Select one : a. There would be no discrimination in lending by local banks. b. The economy would primarily be based on a barter system rather than a fiat system. c. The economy would be less efficient and transactions most likely more costly. d. Banking activities would be less risky....
You can calculate the yield curve, given inflation and maturity-related risks. Looking at the yield curve,...
You can calculate the yield curve, given inflation and maturity-related risks. Looking at the yield curve, you can use the information embedded in it to estimate the market's expectations regarding future inflation, risk, and short-term interest rates. The theory states that the shape of the yield curve depends on investors' expectations about future interest rates. The theory assumes that bond traders establish bond prices and interest rates strictly on the basis of expectations for future interest rates and that they...
15 Changes in the money supply, national income, and inflationary expectations will affect ____ rates. Select...
15 Changes in the money supply, national income, and inflationary expectations will affect ____ rates. Select one: a. long-term b. short-term c. average d. intermediate 17 ____ represent debt of the issuer. Select one: a. Assets b. Bonds c. Revenues d. Stocks 18 When the Fed increases the money supply, the quantity of loanable funds increases relative to the demand which may result in ____ interest rates. Select one: a. lower b. higher c. no relationship with d. no change...
I need to check my homework, all I dont need any explaining. Thanks 1. When the...
I need to check my homework, all I dont need any explaining. Thanks 1. When the Fed buys short-term Treasury securities, short-term interest rates: a. fall. b. rise. c. could rise or fall. d. stay the same. 2. Which is NOT a duty performed by the Federal Reserve System? a. manage the nation's payment system b. print money c. regulate the U.S. banking system d. maintain the bank account for the U.S. Treasury 3. If the Fed wants to decrease...
1. The Federal Reserve Act says that the Fed must try to achieve​ ______. A. a...
1. The Federal Reserve Act says that the Fed must try to achieve​ ______. A. a balanced budget B. maximum​ employment, stable​ prices, and moderate​ long-term interest rates C. a stable U.S. dollar on foreign exchange markets and moderate​ long-term and​ short-term interest rates D. an economic environment in which investment in U.S. stock and money markets is encouraged The Federal Reserve Act says that the Fed must use​ ______ to achieve its objectives. A. bank reserves B. commercial banks...
Read the RBA’s May 2020 interest rate decision: Explain: Your understanding of why the RBA made...
Read the RBA’s May 2020 interest rate decision: Explain: Your understanding of why the RBA made the decision that they did, with respect to the content of the interest rate decision statement itself and also the RBA’s policy objectives What the RBA’s monetary policy decision means in terms of practical implementation The expected transmission of the monetary policy decision to economic outcomes Statement by Philip Lowe, Governor: Monetary Policy Decision Number2020-13 Date5 May 2020 At its meeting today, the Board...
I just need the following questions answers Quantitative Research Designs 101 1. Quantitative research attempts to...
I just need the following questions answers Quantitative Research Designs 101 1. Quantitative research attempts to do which of the following? a. Identify, define and measure factors that contribute to a disorder or disease. b. Examine relationships among factors. c. Evaluate the cost-effectiveness of an intervention. d. All of the above 2. Qualitative and quantitative research designs are appropriate to answer different types of public health questions. Which of the following is NOT an objective of qualitative research? a. To...
Multiple Choice 11. Prepayment risk is: A. the risk you will not receive the cash flows...
Multiple Choice 11. Prepayment risk is: A. the risk you will not receive the cash flows on a mortgage-backed security B. the risk that you will receive the cash flows sooner than expected and be forced to invest at a lower rate. C. the risk that you will receive the cash flows later than expected and not be able to invest at current, higher rates. 12. Based on the video Inside the Meltdown, it appeared that the main reason Lehman...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT