The monetary policy in which the central bank purchased assets other than short-term government securities is called:
A) maturity transformation.
B) shadow banking.
C) quantitative easing.
D) debt overhang.

Question

Quizplus · Accepted Answer

Quantitative easing is a monetary policy where the central bank purchases assets other than short-term government securities, in order to inject liquidity into the economy and lower interest rates. This includes purchasing longer-term government bonds or mortgage-backed securities, which increases the money supply and encourages lending and investment.

The Monetary Policy in Which the Central Bank Purchased Assets