Exam 12: Monetary Policy

The money supply curve would be perfectly inelastic if:

Which of the following is an argument that supports the non-independence of a country's central bank from its government?

The overnight cash rate is determined:

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

If interest rates rise, this will _________ the cost of buying new homes, so ________ new homes will be purchased thereby reducing ___________ expenditures.

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

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

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

Which of the following does the Reserve Bank of Australia use as its main measure of monetary movements in Australia?

In the 1970s and 1980s, which method did the Reserve Bank of Australia use in conducting monetary policy?

A decrease in the supply of cash on the overnight money market will lead to a(n)____________ in interest rates and a(n)_________ in investment expenditure.

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

How do economists generally rate the Reserve Bank of Australia's performance in the 1980s, 1990s and 2000s? _____________________________________________________________________________________________ _____________________________________________________________________________________________

The Reserve Bank of Australia's main monetary policy target is:

Refer to Table 12.2 for the following questions. Table 12.2 -Consider the hypothetical information in Table 12.2 for potential GDP, real GDP and the price level in 2016 and in 2017 if the Reserve Bank of Australia does not use monetary policy. If the RBA uses monetary policy successfully to keep real GDP at its potential level in 2017, which of the following will be lower than if the RBA had taken no action?

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.

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

Rising prices erode the value of money as a ________ and a ________.

The money demand curve has a:

If the Reserve Bank of Australia lowers the interest rate, this will: ________ inflation and ________ the rate of growth of real GDP in the short run.