What is Quantitative Easing and evaluate how it impacts an economy?

Quantitative Easing is the introduction of new money into the money supply and is performed by the central bank. There are several effects associated with quantitative easing, one such positive impact is that it provides an economic stimulus as there is increaded lending by banks. This increase in lending causes businesses to inest more shifting AD outwards due to investment being a component of AD.

However one negative impact is that there is the opportunity for the new money to be misused, the money could be utilised to fund bankers bonuses or may not be lent out by the commerical banks. This causes there to be a reduced impact as the new money doesn't flow around the money supply how it was intended to. Furthermore bonuses could lead to inflation if it leads to significant increase in consumption which would shift the AD curve outwards.