Quantitative Easing (QE)
Quantitative Easing (QE) is a monetary policy tool in which a central bank purchases longer-term securities to inject liquidity and expand its balance sheet. The goal is to influence longer-term interest rates and financial conditions when conventional policy space is limited.
Example: After the 2008 financial crisis, the Federal Reserve engaged in QE by purchasing large quantities of longer-term securities to support liquidity and influence long-term interest rates.
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