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Quantitative Easing

Quantitative Easing Definition

This is a financial policy used by central banks (such as the Federal Reserve in the US) to increase the supply of money in the economy.  Quantitative Easing is usually used when interest rates are close to zero in order to affect the price of money in order to bring down interest rates.


Additional meaning of Quantitative Easing:

This policy is usually invoked when the normal methods to control the money supply have failed, i.e the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero. It has been termed the electronic equivalent of simply printing legal tender.


RELATED TERMS
Quantitative Analysis
RELATED CATEGORIES
Economy







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