If the Reserve Bank decreases the cash rate, in the months following the long-term interest rate ________ and, other things being equal, consumption expenditure and investment ________.

Question

Quizplus · Accepted Answer

When the Reserve Bank decreases the cash rate, it typically leads to a decrease in long-term interest rates as well. Lower interest rates make borrowing cheaper, which tends to increase consumption expenditure and investment.

If the Reserve Bank Decreases the Cash Rate, in the Months