Explain the three channels economists have identified through ...

[CQXA]

Explain the three channels economists have identified through which quantitative or credit easing may affect the economy.
 
  What will be an ideal response?

Question 2

Suppose bank A has assets of 100, liabilities of 60, and capital of 40. Its capital ratio is
 
  A) 40.
  B) 66.
  C) 25.
  D) 60.

[sylvia]

Answer to Question 1

1 ) When arbitrage fails, credit easing can work. 2 ) Quantitative easing may affect expectations of future nominal interest rates. 3 ) Quantitative easing may affect expectations of inflation.

Answer to Question 2

A

[CQXA]

YES! Correct, THANKS for helping me on my review

[samiel-sayed]

Thanks for the timely response, appreciate it