It is my understanding that quantitative easing is a “monetary policy in which a

Question

It is my understanding that quantitative easing is a “monetary policy in which a central bank purchases government securities or other securities form the market in order to lower interest rates ad increase the money supply.” This policy is put into place to keep from printing new banknotes and when short term interest rates are approaching zero. There seems to be much controversy among experts on whether this policy truly works. It’s been said that it increases the central bank’s balance sheets. It’s very important that the dollar is not eased too much when the dollar value is already at a low because it would make the dollar weaker.
http://www.investopedia.com/video/play/moneyshow-quantitative-easing-forex/

1. So you think a weaker dollar is bad? Why?

Explanation / Answer

Weak dollor is BAD or GOOD ?

Actually , It depends from whose perspective you are seeing it.

For an American importer , It is BAD becuase he has to pay more than last year as dollor has become weak.

For an American exporter , It is Good .because now American products cheaper . That is demand is more for american products. So flow of money happens .

For Other country Exporters : Bad

For Other Country importers : Good

So this suffice you why dollor should not waeken in the world market .

Easing is fine not to an extent where it loses it own potentiality.

Happy learning.

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