Quantitative easing is a high-risk monetary policy tool as it runs the risk of ________.
A) possibly creating deflation
B) possibly creating inflation and even hyperinflation
C) having no effect
D) having very short-term effects

Question

Quizplus · Accepted Answer

Quantitative easing involves injecting a large amount of money into the economy, which can lead to an increase in inflation. If not managed properly, it can even lead to hyperinflation, which can have disastrous economic consequences.

Quantitative Easing Is a High-Risk Monetary Policy Tool as It