Question 3 Monetary Policy (12 points out of 50) With Open Market Operations, the Fed buys or sells govern ment debt (Treasury bills and bonds) in the open market If the Fed buys a large amount of Treasury bills and bonds (They used to call this Quantitative Easing , now it's Large Scale Asset Purchases , or just Purchases ), what change would you expect in Interest Rates and in Inflation Part A How would Interest Rates change Increase or Decrease Please explain why and how this change is happening Type your answer and explanation here Part B How would Inflation change Increase or Decrease Please explain why and how this change is happening Type your answer and explanation here

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Question 3  Monetary Policy (12 points out of 50) With Open Market Operations, the Fed buys or sells govern  ment debt (Treasury bills and bonds) in the open market  If the Fed buys a large amount of Treasury bills and bonds (They used to call this  Quantitative Easing , now it's  Large Scale Asset Purchases , or just  Purchases ), what change would you expect in Interest Rates and in Inflation  Part A  How would Interest Rates change  Increase or Decrease Please explain why and how this change is happening  Type your answer and explanation here  Part B  How would Inflation change  Increase or Decrease Please explain why and how this change is happening  Type your answer and explanation here

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Question 3: Monetary Policy (12 points out of 50) With Open Market Operations, the Fed buys or sells govern- ment debt (Treasury bills and bonds)

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