Aparna Lucknow, India 601 Questions 0 Answers 0 Best Answers 678 Points View Profile Aparna Asked: September 30, 20212021-09-30T17:46:14+05:30 2021-09-30T17:46:14+05:30In: Economics What is Quantitative Easing? What is Quantitative Easing? key economy terms Share Facebook 1 Answer Recent 0 Questions 518 Answers 176 Best Answers 0 Points View Profile Best Answer [Deleted User] 2021-09-30T17:47:21+05:30Added an answer on September 30, 2021 at 5:47 pm Quantitative Easing Quantitative easing is an occasionally used monetary policy, which is adopted by the government to increase money supply in the economy in order to further increase lending by commercial banks and spending by consumers. The central bank infuses a pre-determined quantity of money into the economy by buying financial assets from commercial banks and private entities. This leads to an increase in banks’ reserves. Quantitative easing is aimed at maintaining price levels, or inflation. However, these policies can backfire heavily, leading to very high levels of inflation. In case commercial banks fail to lend excess reserves, it may lead to an unbalance in the money market. 0 Reply Share Share Share on Facebook Share on Twitter Share on WhatsApp Leave an answerCancel replyYou must login or register to add a new answer. Related Questions What is Spot Price? What is Sovereign Risk?