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Why is the U.S. Treasury market an important indicator for the rest of the economy? Stress in this very large market most likely signals financial
- Why is the U.S. Treasury market an important indicator for the rest of the economy?
- Stress in this very large market most likely signals financial market stress more broadly.
- The U.S. Department of the Treasury produces U.S. currency.
- Large investors make investment decisions based on returns on U.S. Treasury securities.
- The U.S. Treasury market accounts for most of U.S. GDP.
- How did the onset of the pandemic affect businesses and state and local governments?
- They found it difficult to access funds to continue operations.
- They enjoyed the lower cost of borrowing and became more profitable.
- They had opportunities to hire displaced workers and boost productivity.
- They lowered workers wages and tackled additional projects.
- How did the Fed bolster economic activity?
- The FOMC lowered its target range for the federal funds rate to near zero percent.
- The FOMC lowered its target for the unemployment rate.
- The Fed increased its holdings of assets by buying gold on the open market.
- The Fed sent stimulus checks to millions of Americans.
- How did the Fed lower the cost of borrowing from the Fed?
- The Fed provided access to loans from the Fed at local bank branches.
- The Fed lowered the cost of borrowing from its discount window.
- The Fed capped interest rates out to two years at zero.
- The Fed lowered inflation.
- How did the Feds purchase of U.S. Treasury securities and other financial assets help stabilize the financial system?
- They signaled that the Fed would buy all financial assets in the economy.
- They helped the markets for these assets to close down smoothly during social distancing.
- They kept markets working when the financial assets were otherwise difficult to sell.
- They helped the Fed raise cash for its own holdings.
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