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Let's say the economy has fallen into a recession and the inflation rate falls to zero percent. a) What open market operations is the Reserve Bank of...

Let's say the economy has fallen into a recession and the inflation rate falls to zero percent.


a) What open market operations is the Reserve Bank of Australia likely to engage in?


b) Why is the interest elasticity of investment important to the Reserve Bank's decision regarding interest rates?

Top Answer

a) buying bonds and securities like treasury bills to increase the... View the full answer

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Part A It will engage in the buying or purchase of the government bonds securities. This is a form of increased money supply... View the full answer

1 comment
  • all the best dear
    • kerryliz
    • May 14, 2018 at 1:44am

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