expansion of credit的意思|示意

Credit expansion is the process of increasing the money supply in an economy by issuing or permitting loans. The process of credit expansion can be thought of as increasing the amount of funds available to borrowers, which can result in businesses and individuals taking on additional debt.

By increasing the money supply, it is possible to stimulate the economy through increased investment, consumption, and production. This can result in increased employment and increased economic growth. Additionally, it can lead to increased inflation if too much money is created.

Credit expansion can be achieved by a central bank, normally through a policy instrument known as quantitative easing. This involves the central bank purchasing bonds from commercial banks and other entities, which increases the amount of money available for lending. Additionally, the central bank can lower interest rates, making it less expensive for businesses to borrow funds.

In some cases, a government may take steps to increase credit expansion by reducing taxes or introducing incentives for businesses to borrow and invest. This can have a similar effect to that of quantitative easing, by increasing the amount of money available for lending.

Generally, credit expansion is a desirable tool to stimulate an economy. However, if not properly managed it can lead to an increase in inflation, as there is more money in circulation than there are goods and services to absorb it. Additionally, if the money is not invested in productive activities then it can lead to an increase in speculative activities, which can be destabilising to the economy.