If the RBA Believes the Economy Is Likely to Fall

Multiple Choice

If the RBA believes the economy is likely to fall into a recession over the next two quarters, its likely response to this will be to:

A) sell government securities to banks in order to increase interest rates.
B) sell government securities to banks in order to decrease interest rates.
C) buy government securities from banks in order to decrease interest rates.
D) buy government securities from banks in order to increase interest rates.