Question 2: In the aftermath of the global financial crisis, the Australian government gave cash hand-outs of up to $900
Posted: Thu May 19, 2022 10:58 am
Question 2: In the aftermath of the global
financial crisis, the Australian government gave cash hand-outs of
up to $900 to most taxpayers, as part of a policy aimed to
stimulate economic growth. What impact would this have had on the
cash rate if there were no intervention on the overnight money
market by the RBA? Briefly explain. (3 marks)
Question 3: True or false? If false, explain
why. (3 marks)
- The Reserve Bank of Australia engages in open market
operations only when it wants to change interest rates.
- A rise in the rate of real interest rate will lead to a
movement downward along the money demand curve.
- If the Reserve Bank of Australia buys financial
instruments in the open market, net exports are likely to
decrease.
financial crisis, the Australian government gave cash hand-outs of
up to $900 to most taxpayers, as part of a policy aimed to
stimulate economic growth. What impact would this have had on the
cash rate if there were no intervention on the overnight money
market by the RBA? Briefly explain. (3 marks)
Question 3: True or false? If false, explain
why. (3 marks)
- The Reserve Bank of Australia engages in open market
operations only when it wants to change interest rates.
- A rise in the rate of real interest rate will lead to a
movement downward along the money demand curve.
- If the Reserve Bank of Australia buys financial
instruments in the open market, net exports are likely to
decrease.