The Effect of a Increase in Interest Rates by the RBA

question 15

Multiple Choice

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

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

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Definitions:

Excise Tax

A tax charged on specific goods and services, such as alcohol and tobacco, usually to discourage their use or generate revenue.

Direct Tax

A tax levied directly on an individual or an organization's income or wealth, such as income tax or property tax.

Local Property Taxes

Taxes imposed by local governments based on the assessed value of property, primarily real estate, used to fund local services such as schools, roads, and police.

Industrial Countries

Nations with developed economies characterized by significant industrial activity and high income per capita.