What the hell is Quantitative Easing? Never understood it properly.
In: Economics
Put simply QE is when the federal reserve buys assets(usually bonds) from the market with money that it prints to stimulate the economy with increased cash.
Imagine you are a person who has a lot of stuff, clothes, tools, furniture, and so on. You have things, but you need money to spend. This stuff can be thought of as the assets the market has in the economy. It has value, but it can’t be spent like money. So I come along and buy your stuff so that you have the money that you need to spend and be productive. This is like the Federal Reserve Bank buying bonds and other assets so the economy can get back to spending and producing.
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