Question: 6. True or False? Explain your reasoning. a) Quantitative easing involves the central bank selling long-term securities in order to increase the money supply. b)

 6. True or False? Explain your reasoning. a) Quantitative easing involves

6. True or False? Explain your reasoning. a) Quantitative easing involves the central bank selling long-term securities in order to increase the money supply. b) Assuming all else constant, a sudden fall in short-term interest rates that will persist indefinitely is good for bond investors who are investing for the long-run because it causes bond prices to rise. c) Central bankers know how to stop inflation, but have a harder time ending deflation (especially when at the zero lower bound)

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