The Effect of an Increase in Interest Rates by the RBA

question 67

Multiple Choice

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

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

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Definitions:

Resource Quantity Demanded

Refers to the total quantity of a resource that buyers are willing and able to purchase at a given price over a specific period.

Total Costs

The sum of fixed and variable expenses incurred by a business in the production of goods or services.

Labor Costs

The total sum of all financial compensations and benefits given to employees in exchange for their work, including wages, salaries, and additional perks.

Substitute Resources

Substitute Resources are alternative inputs that can be used in place of another in the production process, often due to cost advantages or availability.