The Effect of a Decrease in Interest Rates by the RBA

question 64

Multiple Choice

The effect of a decrease in interest rates by the RBA is likely to be that the:

• A) AD curve will shift left.
• B) AD curve will shift right.
• C) AS curve will shift right.
• D) AS curve will shift left.

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Definitions:

Monthly

Pertaining to something that occurs, is done, or is calculated on a monthly basis.

Compounded Semi-Annually

Interest calculation method where interest is added to the principal balance twice a year, leading to exponential growth of the investment.

Monthly Deposits

Regular payments or contributions made into an account every month.

Quarterly Deposits

Deposits made into an account or investment at regular intervals every three months.