The Reserve Bank of Australia lowers the cash rate. A mechanism through which aggregate demand increases is that the lower cash rate
A) raises the exchange rate so that net exports decrease, which increases investment, thereby increasing aggregate demand.
B) decreases other short- term interest rates, which increases investment, thereby increasing aggregate demand.
C) increases other short- term interest rates, which decreases investment, thereby decreasing aggregate demand.
D) decreases other short- term interest rates, which decreases investment, thereby increasing aggregate demand.
Correct Answer:
Verified
Q9: Which of the following issues is a
Q10: If the Reserve Bank of Australia sells
Q11: A decrease in the cash rate
A)lowers the
Q12: The key goal of monetary policy is
Q13: If the Reserve Bank of Australia raises
Q15: An inflation rate targeting rule
A)has been adopted
Q16: When the Reserve Bank increases the cash
Q17: The Reserve Bank of Australia engages in
Q18: During the financial crisis of 2008- 2009,
Q19: In the short run, the Reserve Bank
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