Quantitative Easing Refers To

question 211

Multiple Choice

Quantitative easing refers to:

• A)the selling of bonds to the private sector by a country's central bank in order to ease the money supply.
• B)the purchasing of private sector assets by a country's central bank in order to provide liquidity to the financial system.
• C)the selling of bonds by a country's central bank to the private sector in order to provide liquidity.
• D)the purchasing of private sector assets by a country's central bank in order to tighten liquidity.

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Definitions:

Productive Efficiency

Refers to a situation where an economy or entity cannot produce more of one good without affecting the production of another good, operating at the lowest possible cost per unit.

Allocative Efficiency

A state of resource allocation where goods and services are distributed according to consumer preferences, maximizing overall social welfare.

Economically Inefficient

A condition where resources are not utilized in the best possible manner, leading to potential waste or losses in terms of welfare or output.

Average Total Cost

The total cost of production divided by the total quantity produced, representing the per-unit cost of production.