Which of the Following Statements Is Most Likely to Be

question 14

Multiple Choice

Which of the following statements is most likely to be true?

• A) To run a contractionary monetary policy, the RBA will buy government securities to decrease the cash rate.
• B) To run a contractionary monetary policy, the RBA will sell government securities to increase the cash rate.
• C) To run an expansionary monetary policy, the RBA will buy securities to increase the cash rate.
• D) To run an expansionary policy, the RBA will sell government securities to decrease the cash rate.

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