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If the RBA Wants to Reduce Inflation in the Economy,it

Question 96

Multiple Choice

If the RBA wants to reduce inflation in the economy,it is likely to:

A) buy government securities to put banks' ESAs into surplus, thereby decreasing interest rates.
B) buy government securities to put banks' ESAs into deficit, thereby decreasing interest rates.
C) sell government securities to put banks' ESAs into surplus, thereby increasing interest rates.
D) sell government securities to put banks' ESAs into deficit, thereby increasing interest rates.
E) sell government securities to put banks' ESAs into deficit, thereby decreasing interest rates.

Correct Answer: