Macroeconomics

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Operation Twist: Purpose

MACRO-ZSIYFI

Which of the following is true relating to Operation Twist?

A

This was a fiscal policy aimed at reversing high government spending to lower taxes as an alternative fiscal stimulus.

B

Effort by the Federal Reserve to encourage more interest-sensitive consumption and less private sector investment, to help households.

C

An open market operation by the Federal Reserve to buy long-term government bonds that would lower longer term interest rates and encourage longer-term private investment.

D

An effort by the Federal Reserve to raise longer term interest rates to discourage fiscal deficits by making the cost of borrowing money higher to the Federal government.