This assignment requires both a graph and a narrative of a minimum of 250 words.

Recall that a goal of either Quantitative Easing or Quantitative Tightening is to adjust the yield curve. First, create a yield curve graph similar to the one from Part Three of the Quantitative Easing and Tightening Page. Your graph should show a base case yield curve with near zero near term interest rates and a steep increase to high interest rates in the long-term. Then decide if the Federal Reserve would choose with such a steep curve to utilize Quantitative Easing or Quantitative Tightening to stimulate the economy and draw a second line reflecting the desired impact on the yield curve, that is the yield curve the Federal Reserve would prefer.

Then, write a minimum of 250 words providing the following: (1) definitions of yield curve, quantitative easing, quantitative tightening, (2) an explanation of the graph including the correct choice of QT or QE for the situation and a correct statement of the result and (3) a statement of whether the results would be good or bad if you were hoping to be able to buy a house using a 30 year mortgage, including why it would be good or bad.