Expansionary Monetary Policy

Quantitative Easing (QE)

A policy involving the purchase of government bonds and mortgage-backed securities to increase liquidity in the financial system.

Great Recession

The global economic decline that occurred from 2007 to 2008.

Long-Term Refinancing Operations (LTRO)

A policy providing European banks with cheap long-term loans to alleviate the European debt crisis.

European debt crisis

A financial situation where several European countries faced high debt levels, leading to economic instability.

Negative Interest Rates

A monetary policy that charges banks for holding reserves, incentivizing them to lend more.

Bank of Japan

The central bank of Japan, responsible for implementing monetary policy in the country.

Zero Interest Rate Policy (ZIRP)

A monetary policy keeping the policy rate at or near zero to stimulate borrowing and investment.

Prolonged deflation

An extended period of falling prices and reduced consumer demand.

Stimulus Package (2009-2010)

A series of economic measures taken by China to counteract the effects of the Great Recession.

Reserve requirement ratio

The minimum amount of reserves that must be held by banks, set by the central bank.

Liquidity

The availability of liquid assets to a market or company.

Economic growth

An increase in the production of goods and services in an economy over time.

Mortgage-backed securities

Investment products secured by a mortgage or collection of mortgages.

Incentivizing lending

Encouraging banks to provide loans to businesses and consumers.

Interest rate cuts

Reductions in the rate at which interest is paid by borrowers for loans.

Stagnation

A prolonged period of little or no growth in an economy.

ECB

European Central Bank, responsible for monetary policy within the Eurozone.

Cheap long-term loans

Low-interest loans provided by the ECB to stimulate economic activity.

Financial system

The system that enables people and businesses to manage money and capital.

Central bank

The national bank that provides financial and banking services for its country's government and commercial banking system.

Inflation

The rate at which the general level of prices for goods and services rises.

Economic stimulus

Policy measures undertaken by a government to encourage economic growth.

Monetary policy

The process by which a central bank manages the money supply and interest rates.

Economic measures

Steps taken by a government to influence its economy.

Borrowing

The act of obtaining funds from a lender with an obligation to return it with interest.

Policy rate

The interest rate set by the central bank which determines lending rates in the economy.

Bank reserves

Funds that banks hold in cash or on deposit with the central bank.

Bonds

Debt securities issued by governments or corporations to raise capital.

Lending

The act of providing funds to individuals or businesses with the expectation of repayment.

Economic instability

A situation where an economy experiences unpredictable fluctuations or crises.

Fiscal measures

Government spending and tax policies used to influence economic conditions.

Financial liquidity

The ease with which an asset can be converted into cash.

Regulatory framework

The system of rules and guidelines that govern financial institutions.

Commercial banks

Financial institutions that accept deposits and provide loans to individuals and businesses.

Capital

Financial assets or resources used to fund operations and growth.

Market confidence

The degree of trust investors and consumers have in the market's stability.

Investment

The action of allocating resources, usually money, in order to generate income or profit.

Consumer demand

The desire of consumers to purchase goods and services.

Tax policy

Laws and regulations that govern how individuals and businesses pay taxes.

Debt levels

The total amount of money that an organization or individual owes.

Economic recovery

The phase following a recession, during which the economy regains and exceeds peak employment and output.

Banking institutions

Organizations that accept deposits from the public and create credit.

Interest rates

The amount charged by lenders to borrowers for the use of money, expressed as a percentage.

Consumer spending

The total amount of money spent by consumers in the economy.

Economic policy

Actions taken by the government or monetary authorities to influence economic activity.