What is quantitative easing?
Understand the Problem
The question is asking about the concept 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 central bank purchasing government securities or other financial assets to promote lending and investment.
Answer
Quantitative easing is a monetary policy used by central banks to increase the money supply and stimulate the economy.
Quantitative easing is a monetary policy where a central bank buys financial assets like government bonds to increase the money supply, reduce interest rates, and stimulate the economy.
Answer for screen readers
Quantitative easing is a monetary policy where a central bank buys financial assets like government bonds to increase the money supply, reduce interest rates, and stimulate the economy.
More Information
Quantitative easing was first used as a response to the global financial crisis to help stabilize the economy.
Tips
A common mistake is confusing quantitative easing with regular interest rate cuts. QE involves large-scale asset purchases, not just adjustments to policy rates.
Sources
- Quantitative easing - Wikipedia - en.wikipedia.org
- Quantitative easing (QE) | Definition & Facts | Britannica Money - britannica.com
- What Is Quantitative Easing? - Kiplinger - kiplinger.com
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