An economy is experiencing a severe recession, and its central bank has already lowered the primary short-term policy interest rate to zero. To provide further stimulus, the bank begins purchasing large quantities of long-term government bonds from the open market. What is the most direct intended economic transmission mechanism of this action?
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An economy is experiencing a severe recession, and its central bank has already lowered the primary short-term policy interest rate to zero. To provide further stimulus, the bank begins purchasing large quantities of long-term government bonds from the open market. What is the most direct intended economic transmission mechanism of this action?
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