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Navjeet Kaur

· started a discussion

· 1 Months ago

answer and explanation different (Question:671931.0)

in explanation it is written that it does not involve the printing of new banknotes. but in answer option (C) is correct . how ???

Question:

What is the meaning of ‘quantitative easing’?

Options:
A)

Printing money

B)

Reducing interest rates

C)

Both of these

D)

None of these

Solution:

Ans: (c) Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity. Quantitative easing is considered when short-term interest rates are at or approaching zero, and does not involve the printing of new banknotes.

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