Reaction paper 9 Essay Example | Topics and Well Written Essays - 250 words

Reaction paper 9 - Essay ExampleIt is true that denary easing is done for the following reasons foster employment, encourage lending, encourage borrowing, increase spending and reduce spare-time activity rates. However, it should be noted that valued easing has various risks such as it increases inflation, reduces international trade, it is also a threat to the value of the US dollar, and it also encourages debt by both organisations and consumers. In relation to this, I infer stopping quantitative easing after unemployment has fallen below 7 % will not be bad for the economy.I agree with the author, if the rate of inflation increases from 2% to 2.5% then it will be prudential to stop quantitative easing. In addition, the rate of real GDP has been falling from 2.2 % to 2.4 % and finally to 1.7 %. It means the quantitative easing has very little effect. Furthermore, the reason why federation bank exist is to increase on a sustainable basis real per capita income. However much qua ntitative easing has various benefits it does not increase economic