The Reserve Bank of Australia undertakes ________ to manage interest rates to pursue macroeconomic objectives.
A)printing money
B)monetary policy
C)fiscal policy
D)deposit insurance

Question

Quizplus · Accepted Answer

The Reserve Bank of Australia uses monetary policy to manage interest rates and achieve macroeconomic objectives such as price stability, sustainable economic growth, and full employment. Monetary policy tools include adjusting the official cash rate, managing liquidity in the financial system, and intervening in the foreign exchange market. Printing money (A) is not a common monetary policy tool in developed economies and can lead to inflation. Fiscal policy (C) refers to the government's use of spending and taxation to influence the economy, which is distinct from the Reserve Bank's role. Deposit insurance (D) is a separate policy area that aims to protect depositors in case of bank failure but does not directly affect interest rates or macroeconomic objectives.

The Reserve Bank of Australia Undertakes ________ to Manage Interest