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Fiat currency refers to money issued and recognized by a nation or government, whose value is not directly backed by physical assets like gold or silver, but rather by government credit and legal provisions. Common fiat currencies include the US dollar, euro, and yuan, which are issued and managed by central banks and maintain value stability through monetary policy regulation.

Quantitative Easing (QE) is an unconventional monetary policy tool implemented by central banks that involves large-scale purchases of financial assets (such as government bonds) to increase money supply and inject liquidity into the financial system, typically employed when traditional monetary policy tools have limited effectiveness, aimed at stimulating economic growth and preventing deflation.