What does the term quantitative easing refer to?
A. Raising taxes to control inflation
B. Reducing exports to save money
C. The central bank injecting money into the economy
D. Making more people eligible for unemployment benefits
Answer (1)
The correct answer is letter C. The central bank injecting money into the economyQuantitative easing (QE) is a strategy used by a country’s central bank, like the U.S. Federal Reserve, to increase the money supply during a financial crisis. The central bank does this by buying government bonds and other securities, giving more cash to banks and businesses. This helps increase lending and spending. Think of it like adding more water to a dry field to help the plants grow again. In Asia, countries like Japan have used QE to help boost their economies after times of slow growth or recession.
