One Problem with the Ripple Effect from the Reserve Bank's

question 100

Multiple Choice

One problem with the ripple effect from the Reserve Bank's monetary policy is

• A)that the Reserve Bank's policy sometimes has a large impact on potential GDP as well as its usual impact on aggregate demand.
• B)the fact that the monetary policy transmission process is long and drawn out.
• C)the frequent misalignment of the spread between the actual cash rate and the target cash rate.
• D)that changing the target cash rate seldom has an effect on the markets for reserves and loanable funds.
• E)the tight relationship between the cash rate and aggregate spending.

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Definitions:

Hoist Mechanism

A system or device utilized for lifting or moving heavy objects mechanically.

Damages

Compensation sought or awarded in a legal claim for loss or injury.

Specific Performance

A legal remedy in contract disputes where the court orders the breaching party to fulfill the exact terms of the contract, rather than simply paying damages.

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A legal principle where a person can recover a reasonable value of services provided, even in absence of a contract.