Credit easing is designed to:
A) lower the interest rates of short- term government bonds.
B) raise the interest rates of assets other than short- term government bonds.
C) lower the interest rates of assets other than short- term government bonds.
D) raise the interest rates of assets other than long- term government bonds.
E) lower the interest rates of assets other than long- term government bonds.

Question

Quizplus · Accepted Answer

Credit easing involves the purchase of assets other than short-term government bonds, such as corporate bonds or mortgage-backed securities. By purchasing these assets, the central bank can increase demand for them, which in turn lowers their interest rates, making it easier for businesses and households to borrow and spend, thus stimulating economic growth. Therefore, credit easing is designed to lower the interest rates of assets other than short-term government bonds.

Credit Easing Is Designed To