What is meant by the term "credit easing"?
A) It is a strategy which involves the extension of central bank lending to influence more broadly the proper functioning of credit markets and to improve liquidity.
B) It is a strategy which involves keeping interest rates very low by providing substantial reserves for as long as is necessary to avoid deflation and encourage spending.
C) It is a strategy which involves lowering the required reserve ratio and lowering the federal funds rate to encourage banks to increase loan creation.
D) It is a strategy which involves allowing interest rates to rise slowly by providing substantial reserves for as long as is necessary to avoid inflation.

Question

Quizplus · Accepted Answer

Credit easing refers to a monetary policy strategy in which a central bank extends its lending to influence the proper functioning of credit markets and improve liquidity. This usually involves purchasing financial assets from banks and other financial institutions, which increases the money supply and encourages lending. The aim of credit easing is to stimulate economic activity by making it easier for banks and businesses to access credit, even during times of economic stress.

What Is Meant by the Term "Credit Easing