Exam 17: Monetary Policy

Describe how the Reserve Bank of Australia uses open market operations to change short-term and long-term interest rates. _____________________________________________________________________________________________ _____________________________________________________________________________________________

An expansionary monetary policy would be more effective if it caused

Which of the following is the main goal of monetary policy in Australia?

'Quantitative easing' refers to the action of the central bank

If the central bank uses interest rate targeting,the money supply is

If the Reserve Bank of Australia's policy is described as 'contractionary',then it would

A rise in domestic interest rates relative to interest rates in other countries may lead to an exchange rate

Inflation targeting is when the Reserve Bank of Australia uses monetary policy with the aim of keeping the inflation rate at an annual average of between 2 per cent and 3 per cent in the medium term.

If interest rates rise,

What economic objectives are the Reserve Bank of Australia required to pursue in its conduct of monetary policy and what relative importance is placed on these objectives? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Falling interest rates can

The money market model is concerned with ________ and the loanable funds market model is concerned with ________.

If the Reserve Bank of Australia buys bonds and securities in the open market,this is likely to lead to a ______ in interest rates and a(n)_______ of the Australian dollar.

The effect of monetary policy on long-term interest rates is usually

The Australian share market

Which of the following correctly describes what the Reserve Bank of Australia (RBA)used as monetary targets in the past?

What is the argument against the independence of the Reserve Bank of Australia? _____________________________________________________________________________________________ _____________________________________________________________________________________________

If the Reserve Bank of Australia lowers its target for the cash rate,this indicates that it is

Use the dynamic aggregate demand and aggregate supply model to explain what monetary policy stance the Reserve Bank of Australia should take if the economy is entering a period of high inflation. _____________________________________________________________________________________________ _____________________________________________________________________________________________

The Reserve Bank of Australia