Quantitative easing
Definition
An unconventional monetary policy in which a central bank purchases
government securities or other securities
from the market to in order to lower interest rates and increase the
money supply. Quantitative easing is
a monetary policy to increase money
supply in the market when there is recession or condition when market is going
down .Quantitative easing is considered when short term interest rates are approaching
zero or at zero . quantitative easing does not involve printing of new Notes
Quantitative easing targets commercial banks and financial
firms to encourage lending .
Effect :---
· Very effective in financial slowdown
Done for economic growth
· But too fast quantitative easing can
lead to inflation
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