Which of the following correctly describes what the Reserve Bank of Australia (RBA)used as monetary targets in the past?
A)The RBA used M3 as its main target after 1993.
B)The RBA focused on base money as a target after the deregulation of the financial system.
C)The RBA increased its reliance on interest rate targets since the early 1990s.
D)After 1996, the RBA focused on monetary targeting.

Question

Quizplus · Accepted Answer

The RBA increased its reliance on interest rate targets since the early 1990s. The RBA had previously used monetary targets such as M3 and base money, but shifted towards targeting interest rates as the primary tool for monetary policy. Option A is incorrect as the RBA stopped using M3 as a main target after 1984. Option B is incorrect as the focus on base money ended by the late 1980s. Option D is incorrect as the RBA shifted away from monetary targeting after the mid-1990s.

Which of the Following Correctly Describes What the Reserve Bank