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.
In: 45
The usual way of controlling the money supply by the central bank is through interest rates. Sometimes that is not a good idea, so one of the way they do it is quantitative easing. This injects new money directly into the economy by having the central bank buy bonds and other assets with newly created money. This prevents deflation.
Latest Answers