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One Problem with the Ripple Effect from the Reserve Bank's

Question 89

Multiple Choice

One problem with the ripple effect from the Reserve Bank's monetary policy is


A) that the Reserve Bank's policy sometimes has a large impact on potential GDP as well as its usual impact on aggregate demand.
B) the fact that the monetary policy transmission process is long and drawn out.
C) the frequent misalignment of the spread between the actual cash rate and the target cash rate.
D) that changing the target cash rate seldom has an effect on the markets for reserves and loanable funds.
E) the tight relationship between the cash rate and aggregate spending.

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