| In recent months the term 'quantitative easing' frequently appears in Newspapers. Which of the following are true about such term |
| 1. It aims at reviving consumer spending and economic growth |
| 2. It involves cut down of interest rate by central bank |
| 3. It may also involve selling of government securities by central bank. Which of the statements given above is/are correct? |
A) 1 and 2 only
B) 2 and 3 only
C) 1 and 3 only
D) 1, 2 and 3
Correct Answer: A
Solution :
[a] Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply.
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