Quantitative easing involves the central bank:

A Raising reserve requirements

B Purchasing longer-term government securities and other financial assets to inject liquidity

C Cutting taxes

D Printing physical currency

✓ Correct Answer: Option B

QE: unconventional monetary policy when short-term rates near zero. Central bank buys long-term assets → increases money supply, lowers long-term rates, stimulates lending and investment.

💡 Why is B) the correct answer?

The correct answer to the question "Quantitative easing involves the central bank:" is Option B: Purchasing longer-term government securities and other financial assets to inject liquidity.

The other options — A) Raising reserve requirements, C) Cutting taxes, D) Printing physical currency — are incorrect for this Pre-MBA Exam Prep question. As explained above: QE: unconventional monetary policy when short-term rates near zero. Central bank buys long-term assets → increases money supply, lowers long-term rates, stimulates lending and investment.

📚 About This Pre-MBA Exam Prep Practice Question

This 3-level Pre-MBA Exam Prep question from the Economics topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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Quantitative easing involves the central bank:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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