💼 Pre-MBA Exam Prep

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.

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