-Using the data in the above table, if potential GDP for this economy is $25 billion, then in order to restore full employment, the cash rate can be

Question

Quizplus · Accepted Answer

Lowering the cash rate typically reduces the cost of borrowing, which can stimulate consumption and investment by making loans cheaper for consumers and businesses. Additionally, a lower cash rate can lead to a depreciation of the domestic currency, making exports more competitive and potentially increasing net exports, although the effect on net exports can vary depending on other factors.

-Using the Data in the Above Table, If Potential GDP