The Fed argued that QE3 would work to reduce the unemployment rate. Use the federal funds market, the AD-AS model, and the yield curve, show and explain how QE3 was supposed to impact short and long term interest rates, as well as P, Y, and N according to the Fed.  Discuss why QE3 may not work as advertised.  In other words, what are the limitations of QE?

Macroeconomics
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ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
ChapterD: Bond Prices And The Interest Rate
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The Fed argued that QE3 would work to reduce the unemployment rate. Use the federal funds market, the AD-AS model, and the yield curve, show and explain how QE3 was supposed to impact short and long term interest rates, as well as P, Y, and N according to the Fed.  Discuss why QE3 may not work as advertised.  In other words, what are the limitations of QE?

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