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 typically involves the purchase of government securities or other financial assets to lower interest rates and increase liquidity in the financial system.
Answer
Monetary policy where central banks buy assets to lower interest rates and boost the money supply.
Quantitative easing is a monetary policy strategy used by central banks to purchase securities, reduce interest rates, increase the money supply, and encourage lending.
Answer for screen readers
Quantitative easing is a monetary policy strategy used by central banks to purchase securities, reduce interest rates, increase the money supply, and encourage lending.
More Information
Quantitative easing is often used during times of economic crisis to stimulate growth by encouraging more borrowing and spending. It involves purchasing government bonds and other financial instruments, which can help keep interest rates low and spur investment.
Tips
A common misunderstanding is that QE simply 'prints money'. It's more about shifting financial assets to influence interest rates and economic activity.
Sources
- Quantitative Easing (QE): What It Is and How It Works - Investopedia - investopedia.com
- Quantitative easing | Bank of England - bankofengland.co.uk
- Quantitative easing - Wikipedia - en.wikipedia.org
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