tutor2u | Quantitative easing (QE)

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Quantitative easing (QE)

A central bank uses quantitative easing (QE) to increase the supply of money in the banking system designed to encourage commercial banks to lend at cheaper interest rates i.e. to small & medium sized businesses. It is a form of expansionary monetary policy and has been used as a technique to stimulate aggregate demand at a time when nominal interest rates have fallen to historically low levels.

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