Policies Flashcards
1
Q
quantitative easing
A
expansionary monetary policy used by CB to stimulate AD when economy is in a liquidity trap, i.e. IR cannot be lowered any further to increase AD.
Involves increasing the supply of money in the banking system to encourage commercial banks to lend at lower IR to firms and households.
1
Q
recession
A
decline in real GDP for 2 consecutive quarter
2
Q
A
