The Reserve Bank of Australia is able to use monetary policy to keep real GDP exactly at its potential level.

Question

Quizplus · Accepted Answer

It is not possible for the Reserve Bank of Australia (or any central bank) to keep real GDP exactly at its potential level. This is because there are many factors beyond the control of the central bank that affect the economy, such as technological advancements, natural disasters, changes in global demand, and consumer and business confidence. Monetary policy can influence economic growth and inflation, but it cannot control all aspects of the economy.

The Reserve Bank of Australia Is Able to Use Monetary