The most appropriate monetary policy response during a period of high inflation is the:
purchase of $A currency to reduce imported inflation
sale of government securities in the cash market by the RBA
purchase of government securities in the cash market by the RBA
sale of the $A on foreign currency markets
A loosening of monetary policy will tend to do which of the following:
decrease the level of economic growth
result in a higher value of $A
cause an increase in welfare payments
contribute to a higher budget surplus
A tightening of monetary policy is likely to contribute to which of the following
Less pressure on aggregate demand, lower rate of export growth and a reduction in inflationary pressure
Less pressure on aggregate demand, lower productivity and a reduction in inflationary pressure
Less pressure on aggregate demand, lower rate of growth in real GDP and a reduction in inflationary pressure
Less pressure on aggregate demand, lower productivity and an increase in inflationary pressure
Which of the following is least likely to be under the 'direct' control of the RBA
the cash rate
the value of the dollar
the level of liquidity in the cash market
the level of interest rates
A key monetary policy strength is its
ability to target particular sectors or industries in need of stimulus
ability to control interest rate levels in the economy
ability to have a relatively quick impact on the economy
relative independence from the government of the day
Faced with an economy that is on the brink of a recession, the most likely RBA policy response is to
Purchase $A on foreign currency markets
Sell $A on foreign currency markets
Purchase government securities in the cash market
Sell government securities in the cash market
A tightening of monetary in the USA is most likely to cause the RBA to
Purchase $A on foreign currency market
Sell $A on foreign currency market
Sell government securities in the cash market
Purchase government securities in the cash market
The effects of a monetary policy tightening is likely to be assisted by which of the following events?
a fall in the value of the exchange rate
Lower global commodity prices
A fall in unemployment
A fall in tax rates
A credit squeeze brought on by a global financial crisis, in the form of banks providing less loans or credit, should result in which of the following RBA responses
Sell $A on foreign currency market
Purchase $A on foreign currency market
Sell government securities in the cash market
Purchase government securities in the cash market
If the US dollar were to experience a massive increase relative to all other currencies around the world, this is likely to
provide an additional reason for the RBA to tighten monetary policy
provide an additional reason for the RBA to loosen monetary policy
provide an additional reason for the RBA to leave monetary policy unchanged
provide an additional reason for the RBA to sell Australian dollars