Question

The Turkish Central Bank has been buying financial assets such as government bonds in large amount since the outbreak of COVİD-19 virus. This purchase of financial assets is an example of

Fiscal Policy

Quantitative Easing

Automatic stabilizer

Protectionist Policy

Answer 1

• A financial asset is a liquid asset that represents—and derives value from—a claim of ownership of an entity or contractual rights to future payments from an entity.
• A financial asset's worth may be based on an underlying tangible or real asset, but market supply and demand influence its value as well.
• Stocks, bonds, cash, CDs, and bank deposits are examples of financial assets.
• Quantitative easing is a form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to increase the money supply and encourage lending and investment.
• Buying these securities adds new money to the economy, and also serves to lower interest rates by bidding up fixed-income securities. It also expands the central bank's balance sheet.