Asked by Andrea Madison on May 29, 2024
Verified
The central bank of Kilberis, a country in Western Europe, prints money and uses it to buy government bonds, corporate bonds, and equities. Consequently, the amount of money in the economy has increased. The government expects that the increased amount of money in the economy will flow to banks that will lend it to consumers and investors, increasing consumption and investment and thus economic growth. This scenario is an example of _____.
A) privatization
B) deregulation
C) quantitative easing
D) dual pricing
Quantitative Easing
A monetary policy used by central banks to increase the money supply by buying government securities or other securities from the market.
Central Bank
A national bank that provides financial and banking services for its country's government and commercial banking system and implements monetary policy.
Economic Growth
An increase in the production of goods and services in an economy over time, typically measured as the percentage increase in real GDP.
- Identify the instruments and impacts of fiscal and monetary policy within a nation's economic framework.
- Comprehend the function and tools utilized by central banks in managing the economy.
- Connect economic strategies to a nation's economic development and steadiness.
Verified Answer
AW
Anascensia WarrenJun 04, 2024
Final Answer :
C
Explanation :
This scenario is an example of quantitative easing, a monetary policy where a central bank buys government securities or other securities from the market to increase the money supply and encourage lending and investment.
Learning Objectives
- Identify the instruments and impacts of fiscal and monetary policy within a nation's economic framework.
- Comprehend the function and tools utilized by central banks in managing the economy.
- Connect economic strategies to a nation's economic development and steadiness.