Quantitative easing is an unconventional monetary policy in which a central bank nbs...........

Economic and Social Issues Monetary and Fiscal Policy

Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to:

hike interest rates and increase the money supply.

lower interest rates and decrease the money supply

hike interest rates and decrease the money supply.

lower interest rates and increase the money supply.

None of the options given above

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Explanation:

Quantitative easing, also known as large-scale asset purchases, is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy.Like lowering interest rates, QE is supposed to stimulate the economy by encouraging banks to make more loans. The idea is that banks take the new money and buy assets to replace the ones they have sold to the central bank. That raises stock prices and lowers interest rates, which in turn boosts investment.