If the Reserve Bank of Australia sells bonds and securities in the open market, this is likely to lead to a ______ in interest rates and a(n)_______ of the Australian dollar.

Question

Quizplus · Accepted Answer

When the Reserve Bank of Australia sells bonds and securities in the open market, it reduces the money supply, leading to higher interest rates and an appreciation of the Australian dollar due to increased demand for the currency to purchase the higher-yielding assets.

If the Reserve Bank of Australia Sells Bonds and Securities