An article in BusinessWeek in 2013 reported that Fed Chairman Ben Bernanke testi

Question

An article in BusinessWeek in 2013 reported that Fed Chairman Ben Bernanke testified to Congress that: "If we see continued improvement and we have confidence that that is going to be sustained, then we could-in the next few meetings-we could take a step down in our pace of purchases." According to the article, Bernanke also told Congress that '"premature tightening' could 'carry a substantial risk of slowing or ending the economic recovery."' Source: Nick Summers, "Confusion about the Fed Slowing Its $85 Billion in Monthly Bond Buying Is Roiling the Markets," Bloomberg BusinessWeek, June 10-16,2013. The purchases Fed Chairman Bernanke is referring to are purchases of foreclosed homes. open market purchases of commercial bonds. purchases of foreign currencies. open market purchases of government securities.

Explanation / Answer

The correct answe is option (D). The purchases Fed Chairman Bernanke is referring to is open market purchase of commercial securities. It would recover the slow down of economy in the international market.

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