Suppose the Reserve Bank raises the cash rate.The short-term impact is that other short-term interest rates ________,the exchange rate ________ and the quantity of money and supply of loanable funds ________.

Question

Quizplus · Accepted Answer

When the Reserve Bank raises the cash rate, short-term interest rates typically rise, the exchange rate appreciates (rises), and the quantity of money and supply of loanable funds decrease as borrowing becomes more expensive.

Suppose the Reserve Bank Raises the Cash Rate