If the RBA Wants to Reduce Inflation in the Economy

question 13

Multiple Choice

If the RBA wants to reduce inflation in the economy, it is likely to:

• A) buy government securities to put banks' ESAs into surplus, thereby decreasing interest rates.
• B) buy government securities to put banks' ESAs into deficit, thereby decreasing interest rates.
• C) sell government securities to put banks' ESAs into surplus, thereby increasing interest rates.
• D) sell government securities to put banks' ESAs into deficit, thereby increasing interest rates.

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Definitions:

Financial Measures

A set of quantitative assessments that evaluate a company's financial performance and health, including profitability, liquidity, and solvency metrics.

Linkages

Connections or relationships between different factors, processes, or concepts that interact with or influence each other.

Normalisation

The process of adjusting financial or other measurable data to eliminate the effect of certain variables, making them comparable in a different context.

Competitive Benchmarking

A process where a company compares its products or services against those of its competitors to identify areas for improvement.