What is quantitative easing?
Understand the Problem
The question is asking for an explanation of quantitative easing, which is a monetary policy used by central banks to stimulate the economy by increasing the money supply. This involves the purchase of financial assets to lower interest rates and encourage lending and investment.
Answer
QE is a monetary policy where central banks buy financial assets to lower interest rates and increase money supply.
Quantitative easing (QE) is a monetary policy where central banks buy financial assets to lower interest rates and increase money supply, stimulating economic activity.
Answer for screen readers
Quantitative easing (QE) is a monetary policy where central banks buy financial assets to lower interest rates and increase money supply, stimulating economic activity.
More Information
Quantitative easing is used by central banks during periods of very low interest rates when traditional monetary policy is less effective. It can help prevent deflation.
Tips
A common mistake is confusing QE with printing money, but QE specifically involves buying assets, not giving money directly to individuals.
Sources
- Quantitative easing, explained - Forbes Advisor - forbes.com
- Quantitative Easing (QE): What It Is and How It Works - Investopedia - investopedia.com
- Quantitative easing - Wikipedia - en.wikipedia.org
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