Try bringing up quantitative easing at a dinner party and see how long you can hold your friends' attention.

Key points: Quantitative Easing, or QE, is a last-ditch way for central banks to boost the economy when interest rates are near zero

Quantitative Easing, or QE, is a last-ditch way for central banks to boost the economy when interest rates are near zero Central banks buy bonds, which pushes the interest rates down, filtering through to mortgages and other loans

Central banks buy bonds, which pushes the interest rates down, filtering through to mortgages and other loans Economists are divided over whether the Reserve Bank will need to undertake QE in Australia, and whether it would even work

Known in financial circles as "QE", it's a conversation stopper because it's complex and hard to explain to people outside financial circles — even many people in finance don't really get it.

But it's worth understanding because, if the Reserve Bank (RBA) uses it next year, it will affect most Australians.

Without going into the confusing technicalities, all you need to know is that it will involve the Reserve Bank (Australia's bank to the banks) using its own cash to buy bonds, probably mainly government bonds.

Given that the Reserve Bank literally prints Australia's money, it has a theoretically endless supply.

The more the RBA buys bonds, the more the prices of those bonds rise.

Interest rates on bonds move in the opposite direction to their price. That means as bond prices rise, their interest rates fall.

The effect of this is that interest rates right across the economy — from mortgages to corporate bonds — all fall, because changing the interest rates on government bonds has a ripple effect throughout the money or bond markets.

If the Reserve Bank wants to especially target particular areas — let's say home loans — then it could buy bonds directly in that sector to push mortgage rates down even lower.

Why do QE?

So, what's the point of all this then?

The problem facing policymakers is that the economy is slowing so much that workers are starting to lose their jobs and once those positions are gone, it's becoming increasingly hard to land a new one.

In the past, dropping interest rates has been a great way to stimulate the economy. Unfortunately, interest rates are already very low — a legacy of the global financial crisis.

The cash rate currently sits at 0.75 per cent. This means the Reserve Bank can probably only cut interest rates twice more — once by 0.25 percentage points to 0.5 per cent, then by another 0.25 percentage points to 0.25 per cent.

That's the level the Reserve Bank says it will consider rolling out "unconventional" monetary policy (aka QE).

"Our current thinking is that QE becomes an option to be considered at a cash rate of 0.25 per cent, but not before that," RBA governor Philip Lowe recently remarked.

"At a cash rate of 0.25 per cent, the interest rate paid on surplus balances at the Reserve Bank would already be at zero given the corridor system we operate.

"So from that perspective, we would, at that point, be dealing with zero interest rates."

The bottom line is that the Reserve Bank needs to keep providing stimulus (cheap money) to the economy in the hopes that finding a job becomes a little easier. That way shoppers will likely have more confidence to spend at the stores.

And with very little room to move in cutting interest rates (before they hit zero), QE is really the only option if the RBA wants to keep its foot on the stimulus accelerator.

What's in it for me?

Some economists are forecasting there will be an interest rate cut in February, and then again in May, with QE to be rolled out by the end of next year.

The best-case scenario is that once this has all been implemented, if it's implemented, your mortgage could be significantly cheaper to service.

CommSec estimates that over the year to September, the average family was able to save roughly $24 a week compared with a year earlier (as a result of tax and interest rate cuts).

With two more interest rate cuts and QE, this saving could more than double.

As for those in the jobless queues? Well, it should also become easier for businesses to borrow. Most businesses choose to hire when they invest in a new project, so the more they're investing and growing, the more likely there will be demand for new hires.

The problem is if this kind of logic hasn't worked to date, why would it suddenly change now?

Some economists are warning the opposite of the above will prove correct and that the stimulus won't work, that businesses will continue to pull back on their spending and more jobs will go.

Next year is shaping up to be an important one for the economy.