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Published byVivien Pearson Modified over 9 years ago
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GROUP 7
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An unconventional monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective. Central bank buying specified amounts of financial assets from commercial banks / other private institutions - raising financial assets price, lowering yield and simultaneously increasing the monetary base.financial assetscommercial banksyieldmonetary base can be used to help ensure that inflation does not fall below target. often considered a last resort to stimulate the economy.
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first used by the Bank of Japan (BOJ) to fight domestic deflation in the early 2000s.Bank of Japandeflationearly 2000s as late as February 2001, BOJ claimed that "quantitative easing … is not effective" and rejected its use for monetary policy. global financial crisis of 2007–08, similar policies have been used by the United States, the United Kingdom, and the Eurozone Quantitative easing used by monetary authorities when short- term interest rates have reached or are close to reaching zero. (central bank buying short-term government bonds in order to lower short-term market interest rates)zero
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http://www.marketplace.org/topics/economy/whiteboard/eco nomic-effects-quantitative-easing http://www.marketplace.org/topics/economy/whiteboard/eco nomic-effects-quantitative-easing
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