Which of the following statements is NOT true about open market operation? a. Open market operation refers to actions by the central bank to purchase and sell securities in the open market. b. Open market operation is an important tool for the central bank to conduct monetary policy. c. By selling large quantities of Treasury securities in the open market, the Fed could increase the money supply and lower interest rate. d. By purchasing Treasury securities, the Fed could inject money into the economy.
Which of the following is NOT true about “quantitative easing” (QE) as a monetary policy tool? a. QE is a conventional policy tool in which the central bank provides additional liquidity for the economy and the financial system. b. QE expands the central bank’s balance sheet as the central bank spends money on purchasing securities. c. QE has been used in rare cases in which policy interest rate is close to 0%.