1) According to the article "The Fed will soon start cutting back its $9 trillion balance sheet. Here's why investors are scared about 'quantitative tightening.'", the Fed is planning to reduce the size of its balance sheet by:

a.

Actively selling bonds in its portfolio

b.

Stop reinvesting money from bonds as they reach maturity

c.Lowering the fed funds rate

d.

Giving its bonds to the U.S. Treasury

2) According to the video "The Fed Plans to Taper. Here's What That Means", which of the following is expected to result from the Fed's tapering?

I. Price inflation will begin to decline and stabilize

II. Lending and borrowing will increase significantly

II.Stock market indexes will rise in value dramatically

a.

I only

b.

I and II only

c.

I and III only

d.

I, II, and III