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 can involve purchasing government bonds or other financial assets. The user is looking for a clear explanation of what quantitative easing is and how it affects the economy.
Answer
Quantitative easing is a monetary policy where central banks purchase securities to lower interest rates and increase money supply.
Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy by purchasing securities to lower interest rates, increase money supply, and promote lending.
Answer for screen readers
Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy by purchasing securities to lower interest rates, increase money supply, and promote lending.
More Information
Quantitative easing is typically used during times of low inflation or recession to encourage borrowing and spending. It's considered a non-traditional monetary policy tool.
Tips
It's common to confuse QE with simply increasing interest rates or printing money without understanding the specific asset purchases involved. Remember, QE directly increases the central bank's balance sheet by buying financial assets.
Sources
- Quantitative Easing (QE): What It Is and How It Works - Investopedia - investopedia.com
- Quantitative Easing - Wikipedia - en.wikipedia.org
- Quantitative Easing Explained - Forbes - forbes.com
