In the Market for Bank Reserves, If the Target Rate

question 21

Multiple Choice

In the market for bank reserves, if the target rate is higher than the cash rate, the Reserve Bank will take action to ________ reserves.

• A) increase the demand for
• B) decrease the demand for
• C) decrease the supply of
• D) increase both the demand for and the supply of
• E) increase the supply of

Identify conditions under which dissaving occurs.

Predict the impact of changes in disposable income on total consumption and saving.

Decode complex graphical or data-driven representations of income and consumption/saving relationships.

Distinguish between induced consumption and autonomous consumption.

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Definitions:

Strike-Slip Fault

A geological fault where two blocks of the crust move horizontally past one another, usually along a vertical or near-vertical fracture.

Hogback

A narrow ridgeline with steep slopes on both sides, commonly formed from the erosion-resistant edge of a tilted sedimentary rock layer.

Unmetamorphosed Sandstone

Sandstone that has not undergone metamorphism and retains its original sedimentary characteristics.

Cleavage

The tendency of a mineral to break along flat planar surfaces as determined by the structure of its crystal lattice.