AP MacroeconomicsMoney, Banking & Finance
Quantitative Easing
Quantitative easing is a central bank policy of buying large amounts of long-term assets to inject money and lower interest rates when short-term rates are near zero.
It is used when conventional rate cuts are exhausted (rates already near zero). By buying bonds and other assets, the central bank raises their prices, lowers long-term yields, and expands the money supply to stimulate borrowing and spending.