Quantitative Easing

question 180

Multiple Choice

Quantitative easing

• A) floods the financial system with money.
• B) creates risks of inflation as the economy approaches potential GDP.
• C) replaces liabilities on chartered bank balance sheets with cash assets.
• D) makes it easier for chartered banks to make new loans.
• E) does all of the above.

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Definitions:

Indirect Method

A technique used in cash flow statements to adjust net income for changes in non-cash items and working capital to arrive at cash provided by operating activities.

Net Cash Provided

The amount of cash generated by a company's business activities after all operating costs and expenses have been paid.

Accounts Receivable

Unsettled payments from customers to a company for goods delivered or services rendered.

Free Cash Flow

The amount of cash generated by a business after accounting for operational expenses and capital expenditures, available for distribution among stakeholders.