What is quantitative easing?, Macroeconomics - Analysis - 2 help

Anonymous
timer Asked: Nov 27th, 2016
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Please give read and give your analysis and feedback on the information below in 1 or 2 paragraphs.
  1. What is quantitative easing?

Quantitative easing is an advanced fiscal policy where by the central bank buys government securities from the market in order to reduce interest rates and boost the money flow in the economy. Quantitative easing help raises the monetary supply by saturating financial institutions with capital while trying to encourage increased money lending including liquidity. Quantitative easing is used especially when the short-term interest rates near zero, which entails the printing of new banknotes.

  1. Hasn’t the Fed already tried quantitative easing? When? What were the results? Discuss the method of quantitative easing used by the Federal Reserve during the most recent U.S. recession, including any criticisms of this action.

Yes, Fed has tried quantitative easing. For example, the cessation of large-scale asset that was bought back in October 2014, which was a significant breakthrough in subsiding the surprising monetary policies that was implemented to help the economy recover from the severe financial problem (Bernanke, 2015). Which was a good time to weigh the results of those measures, and to deliberate on what the policy makers should go do to improve the economy (Bernanke, 2015). Just for a start, it is highly important to know what the monetary policy can and cannot do. That is why, Fed opponents dispute that is it hard or difficult for everyone to be rich, which is true because everyone cannot be a million, the economy system is not designed for all of us to prosper so there must be poor, middle class and wealthy or the rich in every society.

Even Fed do not have control over long-term economic fundamental including the skills of the workers, the strength and goals of entrepreneurs, and how new technologies are developed and adapted for moneymaking.Fed can lower economic crisis by alleviating recessions by controlling the monetary policy to make that the economy utilized most of its resources to recover the economy from hardship especially, the workforce. Because the daily increase in unemployed people in the society is big problem that is directly affecting the economic growth and development.

  1. Did QE3 help the economy?

The QE3 is not really help the economic situation, it is only add more to the ongoing crisis in the sense that many companies are closing that their businesses due to bad business as a result of shortage of money supply and these are causing many employees to lose their job bringing hardship on their love ones.

References:

Bernanke (2015). How the Fed Saved the Economy. Full employment without inflation is in sight. The central bank did its job. What about everyone else? Retrieved November 24, 2016, from http://www.wsj.com/articles/how-the-fed-saved-the-...

The Economist (2015). What is quantitative easing? Retrieved November 24, 2016, from

http://www.economist.com/blogs/economist-explains/...

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Essaie
School: Duke University

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Anonymous
awesome work thanks

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