cheap money

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Cheap Money

A monetary policy in which a central bank sets low interest rates so that credit is easily attainable. This makes borrowing easy for business, which stimulates investment and expansion of operations. The immediate result of cheap money is a boost in stock prices; in the medium term, cheap money promotes economic growth. However, if cheap money remains in the economy for too long, it can lead to a situation in which there is a glut of currency or too many dollars chasing too few goods and services leading to inflation. For this reason, most central banks alternate between policies of cheap money and tight money in varying degrees to encourage growth while keeping inflation under control.
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cheap money

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

cheap money

a government policy whereby the CENTRAL BANK is authorized to purchase government BONDS on the open market to facilitate an increase in the MONEY SUPPLY (see MONETARY POLICY).

The increase in money supply serves to reduce INTEREST RATES, which encourages INVESTMENT because previously unprofitable investments now become profitable as a result of the reduced cost of borrowing (see MARGINAL EFFICIENCY OF CAPITAL/INVESTMENT).


Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
'The absence of cold supply chain infrastructure affects the nutritional value of milk, hence the chances of adulteration in loose milk are very high,' he said.
The methodology Loose Pulley market is done with the help of a compilation of the market information that is explained through known parameters of Porter's Five Force Model.
Amy has made it very clear that she loves Loose Women - even telling Caroline Flack during the reunion show that appearing on the programme was the best thing to happen to her since leaving the villa.
Diarrhea and loose stools are a common symptom of IBS.
Drew Kirk, Fruit and Veg Director at Morrisons said: "Many of our customers would like the option of buying their fruit and veg loose. So we're creating an area of our greengrocery with no plastic where they can pick as much or as little as they like.
The national media can play a key role in discouraging consumption of loose milk and milk from non-food graded containers.
He further said that contents of the loose sheets were false and fabricated and his name has been used to malign his political career.
"The ban on sale of loose cigarettes can deprive us of our livelihood," Waqas Ahmed, a shopkeeper in the Mozang are of the city told Pakistan Today.
In Lidl, five loose oranges cost PS1.50, compared with 95p if bought in a packet.
argue that plastic helps preserve of fruit and vegetables For example, six loose bananas from Waitrose cost 84p - a total of 16p cheaper than six packaged bananas.
cheape Sd f Some supermarkets did tend to sell loose fruit for a cheaper price than that in plastic packaging, however.
(CDGI) announced, "in order to provide Premium Diamond Rough at fantastic Entry Price Points for Dealers, Wholesalers, Jewelry Designers, Luxury Retailers & Individual Clientele that want to avail themselves of the rare opportunity to get into Diamond Rough Acquisition/Loose Polished Diamond Acquisition without risk regarding the Resulting Loose Polished Diamond Yields & Specifications, CDGI will Guarantee Minimum Resulting Loose Polished Diamond Yields & Specifications as documented via GIA Diamond Grading Certificates - when CDGI's expert artisans complete the cutting/polishing of the subject Diamond Rough."