In September 2012 the Fed Announced That It Would Buy

Multiple Choice

In September 2012 the Fed announced that it would buy $40 billion of mortgage backed securities per month. One goal of this policy was to ________ the price of these securities and thereby help ________.

A) raise; prices of housing to fall to their new equilibrium
B) raise; lower long-term interest rates
C) lower; make the short-term interest rate more responsive to Fed actions
D) raise; raise long-term interest rates