Economic Tapering
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Describe the term tapering as it relates to the Fed's current QE3 program. Include comments about what the Fed is expected to do regaring any upcoming tapering strategies.
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Solution Summary
This solution explains QE3 and tapering. The sources used are also included in the solution.
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Step 1
Tapering in the context of QE3 means scaling back the bond purchases. Specifically, it means reducing the bond purchases from $85 billion a month to $65 billion a month. The Federal Reserve will taper its asset purchases if it feels that the fiscal policy is having a positive effect.
Step 2
Tapering is related to QE or quantitative easing. Quantitative easing means increasing the liquidity of the market through steps taken by the ...
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