D. Large-scale purchase of assets by the central bank to inject liquidity
Answer: Option D
Solution (By JKSSB Mock Tests)
Quantitative easing is an unconventional monetary policy tool whereby a central bank purchases large quantities of financial assets to inject liquidity into the economy when interest rates are already near zero.
Explanation:
The Balassa-Samuelson effect argues that productivity growth in the tradable sector raises wages economy-wide, increasing the relative price of non-tradables and leading to real appreciation in richer countries.
Explanation:
GNP = GDP + Net factor income from abroad. Net factor income from abroad is the difference between factor income received from abroad and factor income paid to abroad.
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