Please analyze the paragraph below and provide feedback in one or two paragraphs.
“Quantitative Easing a program that Federal regulators use in a hope to encourage economic growth. They do this by 1 keeping interest rates low and 2 buying bonds (usually government) with newly created money. This gives a surplus of funds that the banks can lend out to in a hope that it will boost the economy.
Hasn’t the Fed already tried quantitative easing? When? What were the results? Discuss the method of quantitative easing used by the Federal Reserve during the most recent U.S. recession, including any criticisms of this action.
Yes, the Fed has tried this before twice starting in 2008 the results of both QE1 2 and 3 have been an overall increase in reserves but with very little effect on the interest rates going back to a normal level. The increase has led to a very difficult balancing act between the interest rates and inflation.
As for if it helps the economy the fact is no one knows for sure what the long term effects that is also unknown but so far the short term has shown some improvement with the Quantitative Easing. The market does improve but the effects of the increase government playing with the economy is still evident.”
