The main impact of quantitative easing on the economy is that it 1, pushes long-term interest rates down and encourages investors to purchase more risky assets like shares, which can encourage more business investment and consumer spending. 2, pushes long term interest rates up and encourages investors to purchase more risky assets like shares, which can encourage more business investment and consumer spending 3, pushes long term interest rates up and encourage investors to purchase more risky assets like shares, which can encourage more business investment and consumer spending 4, encourages banks to increase their lending, as explained by the money multiplier 5, involves the provision of free money to private banks.

Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter15: Monetary Policy
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The main impact of quantitative easing on the economy is that it

1, pushes long-term interest rates down and encourages investors to purchase more risky assets like shares, which can encourage more business investment and consumer spending.

2, pushes long term interest rates up and encourages investors to purchase more risky assets like shares, which can encourage more business investment and consumer spending

3, pushes long term interest rates up and encourage investors to purchase more risky assets like shares, which can encourage more business investment and consumer spending

4, encourages banks to increase their lending, as explained by the money multiplier

5, involves the provision of free money to private banks.

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