Question 1

'Monetary policy' targets the

Accepted Answer

A)  long-term real rate of interest. 
B)  long-term nominal rate of interest. 
C)  short-term real rate of interest. 
D)  short-term nominal rate of interest. 
A)  long-term real rate of interest. 
B)  long-term nominal rate of interest. 
C)  short-term real rate of interest. 
D)  short-term nominal rate of interest.

Question 2

Open market operations occur when the Reserve Bank of Australia

Accepted Answer

A)  purchases or sells corporate shares in the market to control interest rates. 
B)  controls the money supply. 
C)  makes loans to foreign banks. 
D)  purchases or sells short-dated financial instruments. 
A)  purchases or sells corporate shares in the market to control interest rates. 
B)  controls the money supply. 
C)  makes loans to foreign banks. 
D)  purchases or sells short-dated financial instruments.

Question 3

Maintaining a strong exchange rate for the dollar in international currency markets is one of the monetary policy goals of the Reserve Bank of Australia.

Accepted Answer

A) True 
 B)False

Question 4

A decrease in interest rates will usually

Accepted Answer

A)  decrease investment spending. 
B)  increase consumption spending. 
C)  decrease government spending. 
D)  decrease net exports. 
A)  decrease investment spending. 
B)  increase consumption spending. 
C)  decrease government spending. 
D)  decrease net exports.

Question 5

Which of the following describes what the Reserve Bank of Australia would do to pursue an expansionary monetary policy?

Accepted Answer

A)  Use open market operations to buy bonds and securities. 
B)  Use open market operations to sell bonds and securities. 
C)  Use open market operations to increase the overnight cash rate. 
D)  Increase interest rates on mortgages and corporate loans. 
A)  Use open market operations to buy bonds and securities. 
B)  Use open market operations to sell bonds and securities. 
C)  Use open market operations to increase the overnight cash rate. 
D)  Increase interest rates on mortgages and corporate loans.

Question 6

Which of the following is not true about monetary policy?

Accepted Answer

A)  Contractionary monetary policy is often more effective at reducing the rate of economic growth than expansionary monetary policy is at increasing the rate of economic growth. 
B)  The burden of contractionary monetary policy is not spread evenly among the population. 
C)  Contractionary monetary policy can reduce export earnings. 
D)  The full effect of monetary policy impacts the economy immediately, as unlike fiscal policy, monetary policy is not subject to time lags. 
A)  Contractionary monetary policy is often more effective at reducing the rate of economic growth than expansionary monetary policy is at increasing the rate of economic growth. 
B)  The burden of contractionary monetary policy is not spread evenly among the population. 
C)  Contractionary monetary policy can reduce export earnings. 
D)  The full effect of monetary policy impacts the economy immediately, as unlike fiscal policy, monetary policy is not subject to time lags.

Question 7

A decrease in real GDP can

Accepted Answer

A)  increase money demand and decrease the interest rate. 
B)  increase money demand and increase the interest rate. 
C)  decrease money demand and decrease the interest rate. 
D)  decrease money demand and increase the interest rate. 
A)  increase money demand and decrease the interest rate. 
B)  increase money demand and increase the interest rate. 
C)  decrease money demand and decrease the interest rate. 
D)  decrease money demand and increase the interest rate.

Question 8

Refer to Figure 17.2 for the following question.
Figure 17.2  
-Refer to Figure 17.2.In this figure,a movement from point A to point B would be caused by

Accepted Answer

A)  a decrease in real GDP. 
B)  an increase in the price level. 
C)  a decrease in the price level. 
D)  an increase in the interest rate. 
A)  a decrease in real GDP. 
B)  an increase in the price level. 
C)  a decrease in the price level. 
D)  an increase in the interest rate.

Question 9

How does the Reserve Bank of Australia affect the supply of cash?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The Reserve Bank of Australia (RBA)manag

Question 10

Accounts held with the Reserve Bank of Australia (RBA)which are used by financial institutions to settle payments between each other and with the RBA are called _________.

Accepted Answer

A)  credit accounts 
B)  real-time gross settlement accounts 
C)  debit accounts 
D)  exchange settlement accounts 
A)  credit accounts 
B)  real-time gross settlement accounts 
C)  debit accounts 
D)  exchange settlement accounts

Question 11

The Reserve Bank of Australia has its independence from the government guaranteed by the Australian Constitution.

Accepted Answer

A) True 
 B)False

'Monetary policy' targets the

Open market operations occur when the Reserve Bank of Australia

Maintaining a strong exchange rate for the dollar in international currency markets is one of the monetary policy goals of the Reserve Bank of Australia.

A decrease in interest rates will usually

Which of the following describes what the Reserve Bank of Australia would do to pursue an expansionary monetary policy?

Which of the following is not true about monetary policy?

A decrease in real GDP can

Refer to Figure 17.2 for the following question. Figure 17.2 -Refer to Figure 17.2.In this figure,a movement from point A to point B would be caused by

How does the Reserve Bank of Australia affect the supply of cash? _ _

Accounts held with the Reserve Bank of Australia (RBA)which are used by financial institutions to settle payments between each other and with the RBA are called _________.

The Reserve Bank of Australia has its independence from the government guaranteed by the Australian Constitution.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

Exam 17: Monetary Policy

'Monetary policy' targets the

Open market operations occur when the Reserve Bank of Australia

Maintaining a strong exchange rate for the dollar in international currency markets is one of the monetary policy goals of the Reserve Bank of Australia.

A decrease in interest rates will usually

Which of the following describes what the Reserve Bank of Australia would do to pursue an expansionary monetary policy?

Which of the following is not true about monetary policy?

A decrease in real GDP can

Refer to Figure 17.2 for the following question. Figure 17.2 -Refer to Figure 17.2.In this figure,a movement from point A to point B would be caused by

How does the Reserve Bank of Australia affect the supply of cash? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Accounts held with the Reserve Bank of Australia (RBA)which are used by financial institutions to settle payments between each other and with the RBA are called _________.

The Reserve Bank of Australia has its independence from the government guaranteed by the Australian Constitution.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

How does the Reserve Bank of Australia affect the supply of cash? _ _