Quick Definition

Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy by increasing the money supply and lowering interest rates through the purchase of government securities or other financial assets.

Examples

• 1A central bank buys government bonds to inject liquidity into the financial system, aiming to encourage lending and investment.
• 2During a recession, a central bank may implement QE to decrease borrowing costs and stimulate economic growth.
• 3QE can lead to higher asset prices as more money flows into the economy, potentially boosting stock and real estate markets.

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