What is quantitative easing?
Understand the Problem
The question is asking for an explanation of the concept of quantitative easing, a monetary policy used by central banks to stimulate the economy by increasing the money supply.
Answer
Quantitative easing is a monetary policy where central banks buy securities to lower interest rates and boost the money supply.
Quantitative easing (QE) is a monetary policy strategy where central banks purchase securities to reduce interest rates, increase the money supply, and encourage lending and investment.
Answer for screen readers
Quantitative easing (QE) is a monetary policy strategy where central banks purchase securities to reduce interest rates, increase the money supply, and encourage lending and investment.
More Information
By increasing the supply of money and lowering interest rates, QE aims to stimulate economic activity during periods of low inflation and recession.
Tips
One common misconception is that QE is equivalent to printing money, but it involves purchasing financial assets with the aim of increasing money supply indirectly.
Sources
- Quantitative easing | Bank of England - bankofengland.co.uk
- What Is Quantitative Easing? - Kiplinger - kiplinger.com
- Quantitative Easing (QE): What It Is and How It Works - Investopedia - investopedia.com
