Question

Large-scale asset purchases (LSAPs)

A		have dramatically increased the Fed's balance sheet
B		refer to one type of unconventional monetary policy that the Fed has undertaken to stimulate the U.S. economy in response to the Federal funds rate hitting the zero-lower bound.
C		consist of different decisions by the Fed to purchase longer-term treasuries and mortgage-backed securities in an effort to lower interest rates that are relevant for the economy.
D		All of the above
E		None of the above.

Answer 1

Solution: All of the above

Explanation: The purchases of large-scale asset undertaken by the Fed is termed to be a to be a form of "unconventional" monetary policy in an effort to lower interest rates to stimulate economy; and dramatically increased since 2007.