If the Reserve Bank Is Concerned About a Possible Recession

question 42

Multiple Choice

If the Reserve Bank is concerned about a possible recession, it ________ the target cash rate and ________ securities in open market operations. The supply of money ________ and the short-term interest rate ________.

• A) lowers; sells; decreases; rises
• B) raises; buys; increases; falls
• C) lowers; buys; increases; falls
• D) raises; sells; increases; rises
• E) raises; buys; decreases; falls

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