The meaning of quantitative easing is a term use to describe a central bank action to put more money into the money supply of an economy.
Central bank are able to do this by using monetary policy to produce more money to go into circulation.
The increase of cash gives commercial banks the liquidity needed to supply money to individual or company as a loan.
Quantitative easing is a tool used to stimulate the economy when it start to slow down. This help the economy stop it decline in growth so that it does not go into a recession.
Central Banks usually use quantitative easing as a last resort when the change of interest fail to stimulate the economy.
One of the risk of using quantitative easing is that it can cause inflation. Since there is so much money in circulation. The value of the dollar can decrease, which, will decrease your purchasing power for items you want to buy.
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