Can somebody please explain to me what quantitative easing is in simple terms?
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Quantitative easing is a monetary policy action where a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity.
In layman’s terms, when you have a bond, you have given the government money at some point in the past in exchange for a promise for more money at some point in the future (that is what a bond is). That means that you don’t have money to spend _today_ – your money is already gone, tied up in a bond that will pay out in the future. Economies work when money is being spent and circulated, so they buy your bond from you today for _some_ of the future value, giving you money you can spend right now on other things.
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