I’ve been hearing these terms but don’t really understand what they mean, when and why are they used by the government and how exactly they affect prices and general standard of living.
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The government issues currency. The government regulates the banking system. The government loans money at a set rate called the deposit rate. This is the most important type of quantitative whatever. They try to spread debt across time, kind of like a car payment, but for the whole economy. Of course, if you stimulate too much demand, by making tons of low interest loans, then the price of everything goes up (i.e. inflation now). The government uses buying and selling in addition to loans to create demand and affect prices in the economy, to make recessions easier to handle.
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