What is quantitative easing?
Understand the Problem
The question is asking for an explanation of the economic concept of quantitative easing, which involves the central bank increasing the money supply to stimulate the economy.
Answer
Quantitative easing is a monetary policy where central banks buy securities to lower interest rates and increase money supply.
Quantitative easing (QE) is a monetary policy strategy where central banks purchase financial securities to lower interest rates and increase money supply to stimulate the economy.
Answer for screen readers
Quantitative easing (QE) is a monetary policy strategy where central banks purchase financial securities to lower interest rates and increase money supply to stimulate the economy.
More Information
Quantitative easing is used by central banks during periods of low inflation or economic stagnation to encourage borrowing and investment by lowering long-term interest rates.
Tips
A common mistake is to confuse QE with traditional open market operations, which typically target short-term interest rates.
Sources
- What Is Quantitative Easing? - Forbes - 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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