If the economy is inflationary,the RBA would most likely:
A)encourage banks to provide loans by buying government securities.
B)encourage banks to provide loans by raising the cash rate.
C)encourage banks to provide loans by selling government securities.
D)restrict bank lending by selling government securities.
E)restrict bank lending by lowering the cash rate.

Question

Quizplus · Accepted Answer

In an inflationary economy, the RBA would likely sell government securities to restrict bank lending, thereby reducing the money supply and curbing inflation.

If the Economy Is Inflationary,the RBA Would Most Likely