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If the Reserve Bank of Australia Buys Financial Securities, This

Question 109

Multiple Choice
If the Reserve Bank of Australia buys financial securities, this:

If the Reserve Bank of Australia buys financial securities, this:


A) increases reserves, decreases interest rates, and encourages banks to make more loans.
B) decreases reserves, increases interest rates, and encourages banks to make more loans.
C) decreases reserves, causes banks to reduce their loans, and increases interest rates.
D) increases reserves, causes banks to reduce their loans, and decreases interest rates.

Correct Answer:

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