A contractionary stance in monetary policy by the Reserve Bank of Australia (RBA) could be achieved by

Buying Govt Securities to decrease cash in the overnight money market

When the Reserve Bank of Australia buys government securities on the overnight market, the effect will be to

Decrease the supply of cash in the money market & increase the cash rate.

Who do higher interest rates benefit?

Those with high existing wealth

Currently, the RBA is using less expansionary monetary policy to:

Ease rising inflationary pressures

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Monetary Policy and Current Events

15 termsStudBud Administration32 plays

U4 AOS1b Economics and some current events in Australia

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Questions 15

Answers

1
When conducting expansionary monetary policy the RBA will:
Increase interest rates
Decrease interest rates
Sell government securities
Buy government securities
2
When the RBA announces changes to monetary policy they are manipulating the:
Interest rates
Welfare rates
Cash rates
Tax rates
3
Which of the following is likely to occur when interest rates are low?
Financial institutions will create stricter lending criteria
Savings rates will increase
Investment spending will decrease
Asset values will rise
4
A depreciation of the Australian dollar might occur if there is a
I've read 'We're going on a bear hunt' like 80 times this week. It's a lot
Decrease in the cash rate
Increase in the cash rate
Increase in economic activity in China
5
Which goal has the RBA been using Monetary Policy to target more recently?
Low inflation
Strong and Sustainable Economic Growth
Full Employment
Economic Growth
6
A contractionary stance in monetary policy by the Reserve Bank of Australia (RBA) could be achieved by
Selling Govt Securities to increase cash in the overnight money market
Selling Govt Securities to decrease cash in the overnight money market
Buying Govt Securities to increase cash in the overnight money market
Buying Govt Securities to decrease cash in the overnight money market
7
When the Reserve Bank of Australia buys government securities on the overnight market, the effect will be to
Decrease the supply of cash in the money market & increase the cash rate.
Increase the supply of cash in the money market & increase the cash rate.
Decrease the supply of cash in the money market & increase the cash rate.
Increase the supply of cash in the money market & decrease the cash rate.
8
Who do higher interest rates benefit?
Those with existing debt
Businesses with existing loans
Those with high existing wealth
Those looking to borrow money
9
The impact of higher interest rates leading to banks tightening lending criteria is related to the:
Asset values channel
Savings and investment channel
Cash flow channel
Availability of credit channel
10
Currently, the RBA is using less expansionary monetary policy to:
Increase the unemployment rate
Laugh at the lower income households they make struggle
Ease rising inflationary pressures
Slow unsustainable rates of economic growth
11
The RBA increasing cash rates impacting on household discretionary income is known as the
Exchange Rate channel
Savings and investment channel
Cash flow channel
Asset values channel
12
What is the cash rate currently?
1.25%
1.85%
0.1%
1.75%
13
When the RBA increases the cash rate, what would happen to the exchange rate?
It would depreciate
Excuse me? What's an RBA?
Interest rates don't impact the exchange rate
It would appreciate
14
Traditionally, which goal does Monetary Policy work best to achieve?
Strong and sustainable economic growth
Economic Growth
Full Employment
Low inflation
15
If the RBA were to increase the cash rate, how would this impact the exchange rate.
Cash rates do not impact the exchange rate
Depreciate the exchange rate
I'm wasting your time making you read this answer,jokes on you. Still here?
Appreciate the exchange rate

Monetary Policy and Current Events Flashcards | StudBud