If the Reserve Bank of Australia sells financial securities, this: a. decreases bank reserves, increases interest rates, and discourages banks to make more loans. b. decreases bank reserves, increases interest rates, and encourages banks to make more loans. c. increases bank reserves, causes banks to increase their loans, and increases interest rates. d. increases reserves, causes banks to reduce their loans, and decreases interest rates
If the Reserve Bank of Australia sells financial securities, this: a. decreases bank reserves, increases interest rates, and discourages banks to make more loans. b. decreases bank reserves, increases interest rates, and encourages banks to make more loans. c. increases bank reserves, causes banks to increase their loans, and increases interest rates. d. increases reserves, causes banks to reduce their loans, and decreases interest rates
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
Section: Chapter Questions
Problem 2CQQ
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Question
If the Reserve Bank of Australia sells financial securities, this:
a.
decreases bank reserves, increases interest rates, and discourages banks to make more loans.
b.
decreases bank reserves, increases interest rates, and encourages banks to make more loans.
c.
increases bank reserves, causes banks to increase their loans, and increases interest rates.
d.
increases reserves, causes banks to reduce their loans, and decreases interest rates
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