Monetary Policy

Monetary Policy

12th Grade

8 Qs

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Monetary Policy

Monetary Policy

Assessment

Quiz

Created by

Vivian Ma

Business

12th Grade

Hard

8 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

Expansionary monetary policy is most likely to be maintained if the

Australian Government is still running a budget deficit.

value of the Australian dollar is below its long-term average.

rate of inflation is below the Reserve Bank of Australia’s (RBA) target.

unemployment rate is below what is required to achieve full employment.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which one of the following is not a role of the RBA?

adjusting tax rates

issuing Australia’s bank notes

managing foreign currency reserves

providing specialist banking services to the Australian Government

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A reduction in the cash rate is likely to result in

an increase in the value of the Australian dollar and a lower inflation rate.

a decrease in the value of the Australian dollar and a higher inflation rate.

a decrease in the value of the Australian dollar and a higher unemployment rate.

an increase in the value of the Australian dollar and a lower unemployment rate.

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which one of the following is least likely to be an example of a monetary policy transmission mechanism resulting from lower interest rates?

an increase in net capital inflow

an increase in borrowings for housing investment

a decrease in imports resulting from a fall in the value of the Australian dollar

an increase in exports resulting from a fall in the value of the Australian dollar

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A contractionary stance in monetary policy by the Reserve Bank of Australia (RBA) could be achieved by

selling Commonwealth Government Securities to increase cash in the overnight money market.

buying Commonwealth Government Securities to increase cash in the overnight money market.

selling Commonwealth Government Securities to decrease cash in the overnight money market.

buying Commonwealth Government Securities to decrease cash in the overnight money market

6.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

Expansionary monetary policy is most likely to cause

a decrease in welfare payments.

an appreciation of the Australian dollar.

a reduction in the rate of economic growth.

an increase in the size of the budget deficit.

7.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

When the economy is experiencing low rates of inflation and low rates of economic and employment growth, the Reserve Bank of Australia will be likely to

sell government securities in order to increase the cash rate.

sell government securities in order to decrease the cash rate.

purchase government securities in order to increase the cash rate.

purchase government securities in order to decrease the cash rate.

8.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

When the Reserve Bank of Australia buys government securities on the overnight market, the effect will be to

 

increase the supply of cash in the money market and increase the cash rate.

decrease the supply of cash in the money market and increase the cash rate.

increase the supply of cash in the money market and decrease the cash rate.

decrease the supply of cash in the money market and decrease the cash rate.