What is quantitative easing?
In: Economics
Quantitative easing is a tactic used by a country’s central bank (eg. The federal reserve) to add money to the country’s economy, primarily in times when the economy is slow or have collapsed. Because the central bank cannot give away money for free, it makes large purchases of government bonds or financial assets(Billions of dollars worth of assets). Once the bonds are purchased, the money is then used to fulfill the purpose of the bond (build roads, develop systems etc). This now means that people will be hired to build the roads, materials will be bought and so forth, so that money will now be circulated in the economy thanks to quantitative easing.
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