In which of the following situations would the Reserve Bank of Australia conduct contractionary monetary policy?
A) The RBA believes that aggregate demand was growing too slowly to keep up with potential GDP.
B) The RBA fears that unemployment is climbing above the natural rate of unemployment.
C) The RBA is concerned that aggregate demand would continue to exceed the growth in potential GDP.
D) The RBA is worried that deflation will become a problem.
Correct Answer:
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