What is quantitative easing?
Understand the Problem
The question seems to be seeking information about the concept of quantitative easing, which is a monetary policy aimed at stimulating the economy by increasing the money supply. This involves the central bank purchasing financial assets to lower interest rates and encourage lending and investment.
Answer
A monetary policy where central banks buy securities to lower rates and increase money supply.
Quantitative easing is a monetary policy strategy where central banks purchase securities to reduce interest rates and increase the money supply.
Answer for screen readers
Quantitative easing is a monetary policy strategy where central banks purchase securities to reduce interest rates and increase the money supply.
More Information
Quantitative easing (QE) is a monetary policy tool central banks use to stimulate the economy. Central banks purchase financial assets to increase the monetary base, aiming to lower interest rates and increase the likelihood of lending and investment. QE was notably implemented during the 2008 financial crisis.
Tips
A common mistake is to assume quantitative easing directly involves printing money. Instead, central banks buy financial assets, which increases the reserves of banks in the form of electronic money.
Sources
- Quantitative easing (QE): What It Is and How It Works - Investopedia - investopedia.com
- Quantitative easing | Bank of England - bankofengland.co.uk
- What Is Quantitative Easing? - Kiplinger - kiplinger.com
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