
-The economy is at the equilibrium shown at point a in the above figure. If the Reserve Bank
A) lowers the cash rate, the economy moves to an equilibrium at point b.
B) sells government securities, the economy moves to an equilibrium at point c.
C) raises the cash rate, the economy moves to an equilibrium at point c.
D) sells government securities, the economy moves to an equilibrium at point b.
E) None of the above is correct because the economy will remain at point a in any case.
Correct Answer:
Verified
Q27: When the Reserve Bank wants to slow
Q28: Because investment, consumption expenditure and net exports
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