The process of buying financial assets to stimulate the economy when the central bank target interest rate is near or at zero and the interest rate cannot be lowered further is called:
A)bond-trading.
B)quantitative bidding.
C)open market purchase.
D)quantitative easing.
E)open market sale.

Question

Quizplus · Accepted Answer

Quantitative easing is the process of buying financial assets, such as government bonds, to increase the money supply and stimulate economic growth when interest rates are already near zero. This is done by the central bank, such as the Federal Reserve in the US, to help boost lending and investment when traditional monetary policy approaches have been exhausted. Choices A, B, C, and E are not correct descriptions of this process.

The Process of Buying Financial Assets to Stimulate the Economy