Quantitative easing - Deepstash

Quantitative easing

In recent decades, central banks have tried quantitative easing to infuse the economy with cash while maintaining a low risk of severe inflation. The quantitative easing approach is where a central bank increases cash flow by purchasing another entity's bonds.

Anyone can buy bonds from corporations or governments. When you buy a bond, you're really loaning money to the company or government, who will pay it back later with interest.

  • When a person buys a bond, they're using money already in circulation.
  • When a central bank buys a bond, it creates cash.

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lilhh

I have a passion for architecture. Always eager to learn new things.

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