Which of the Following Describes the Chain of Events the Reserve

question 80

Multiple Choice

Which of the following describes the chain of events the Reserve Bank of Australia uses to fight recession?

• A)Lower the cash rate target, buy government securities, decrease reserves and loans, decrease aggregate demand.
• B)Lower the cash rate target, buy government securities, increase reserves and loans, increase aggregate demand.
• C)Raise the cash rate target, sell government securities, decrease reserves and loans, increase aggregate demand.
• D)Raise the cash rate target, buy government securities, increase reserves and loans, decrease aggregate demand.

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Definitions:

CPP/QPP

Refers to Canada Pension Plan/Quebec Pension Plan, which are public pension plans in Canada designed to provide income for workers upon retirement.

RRSPs

Registered Retirement Savings Plans, a type of financial account in Canada for holding savings and investment assets to support retirement.

Reduced Pension

A retirement plan that provides beneficiaries with lower benefits than originally anticipated or agreed upon.

Contributory Pension Plans

Retirement plans where both the employer and employees contribute to the fund that will be used to provide retirement benefits to the employees.