6.1

Which of the following statements do you agree with? (Marks will be deducted for wrong answers).

Select one or more:

a. RBA will increase money supply to reduce interest rates.

b. RBA will increase money supply to expand the economy.

c. Reducing tax to try and stimulate consumer spending is LESS expansionary than direct spending into the economy by the Government.

d. To keep inflation between 2% and 3%, RBA will increase money supply if the annual inflation rate rises above 3%.

e. It is bad policy for the Government to run a budget DEFICIT during these COVID19 pandemic times