ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes
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No
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Either A or B
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None of the above
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Detailed explanation-1: -QE increases the price of financial assets other than bonds, such as shares. Here’s an example. Say we buy £1 million of government bonds from an asset manager. In place of those bonds, the asset manager now has £1 million in cash.
Detailed explanation-2: -Quantitative easing (QE) is a form of monetary policy in which a central bank, like the U.S. Federal Reserve, purchases securities from the open market to reduce interest rates and increase the money supply.
Detailed explanation-3: -The purpose of QE is to level out markets to make spending and investing money more appealing and accessible to consumers. Lower interest rates can increase the likelihood that business and civilian borrowers will take out loans to make purchases, thereby boosting economic activity. 3.