When the Reserve Bank Fears Inflation, It Will ________ the Target

question 23

Multiple Choice

When the Reserve Bank fears inflation, it will ________ the target cash rate by _______ government securities in open market operations and the quantity of money ________.

• A) lower; buying; increases
• B) lower; selling; decreases
• C) raise; selling; decreases
• D) raise; buying; decreases
• E) raise; selling; increases

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Definitions:

Literally Occur

An event or action that takes place exactly as described or indicated without metaphor or exaggeration.

Agreement

A mutual understanding or arrangement between two or more parties outlining their respective rights and duties.

Novation

Novation is the legal act of replacing an existing obligation with a new one, substituting a new party or obligation into an original contract.

Original Promisor

The individual or entity who initially makes a promise in a contractual agreement, especially in contexts involving subsequent assignments or transfers of obligations.