Which among the following pertain to Quantitative Easing?
1. Cutting Interest Rates
2. Pumping Money in the economy directly
3. Issuing Bonds in the market
Select the correct option from the codes given below:
Central banks usually stimulate a slowing economy by cutting interest rates, which encourage people to spend by borrowing more or discouraging them to save. But with interest rates in the developed world already close to zero, that option is no longer available. In such situations , the central banks resort to pumping money directly into the economy, a process known as quantitative easing. It is done by buying bonds — usually government paper but can also be private bonds — from banks and financial institutions. The developed countries used quantitative easing to spur growth in recent years.
This question is a part of GKToday's Integrated IAS General Studies Module