-In the above figure, suppose point C is the original equilibrium. If the Reserve Bank of Australia increases the cash rate, the new equilibrium is given by point

Question

Quizplus · Accepted Answer

An increase in the cash rate by the Reserve Bank of Australia typically leads to higher interest rates, which can reduce investment and consumer spending, shifting the aggregate demand curve to the left. This results in a new equilibrium at a lower level of output and possibly a lower price level, represented by point A.

-In the Above Figure, Suppose Point C Is the Original