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

question 23

Multiple Choice

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

• A)that changing the cash rate seldom has an effect on the markets for reserves and loanable funds.
• B)the fact that the monetary policy transmission process is long and drawn out.
• C)the frequent misalignment of the spread between the cash rate and the cash rate target.
• D)the tight relationship that the cash rate has with the aggregate spending.

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Definitions:

Physical Processes

Natural phenomena or sequences of events involving change in the physical properties of matter or energy.

Cation Exchange

A process where cations are exchanged between a solution and a cation exchange material, often soil or resin.

Humus Formation

The process by which dead organic matter decomposes into humus, a dark, organic material that improves soil fertility and structure.

Federal Legislators

Elected officials at the national level who have the authority to make laws, including members of the United States Congress.