What does the term 'credit easing' refer to?

The term 'credit easing' refers to increasing credit availability in the economy. This process involves the central bank taking specific actions to make credit more accessible and affordable for households and businesses. By improving the flow of credit, the central bank aims to stimulate economic activity, encourage spending, and support loan growth during times of economic distress or slow growth.

While the other options relate to monetary policy actions, they do not accurately describe credit easing. For instance, reducing the overall money supply would have the opposite effect of decreasing credit availability. Buying government bonds can lead to lower interest rates, which may indirectly support credit availability but is not the central focus of credit easing itself. Similarly, raising reserve requirements for banks would restrict the amount of money banks could lend, thereby limiting credit availability rather than increasing it.