In Which of the Following Situations Would the Reserve Bank

question 111

Multiple Choice

In which of the following situations would the Reserve Bank of Australia conduct contractionary monetary policy?

• A)The RBA believes that aggregate demand was growing too slowly to keep up with potential GDP.
• B)The RBA fears that unemployment is climbing above the natural rate of unemployment.
• C)The RBA is concerned that aggregate demand would continue to exceed the growth in potential GDP.
• D)The RBA is worried that deflation will become a problem.

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