If the Economy Is Inflationary,the RBA Would Most Likely

question 117

Multiple Choice

If the economy is inflationary,the RBA would most likely:

• A)encourage banks to provide loans by buying government securities.
• B)encourage banks to provide loans by raising the cash rate.
• C)encourage banks to provide loans by selling government securities.
• D)restrict bank lending by selling government securities.
• E)restrict bank lending by lowering the cash rate.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company makes from its core operations.

Capacity

The maximum amount of work that an organization is capable of completing in a given period of time.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.

Unsold Units

Inventory items that have been produced or acquired but have not yet been sold to customers.