A Government decides to remove any tax on the income deriving from government bonds.

Which of the following statements is correct?

As a result of this shock alone (ignoring any other effect), at equilibrium the corporate bonds' yield __________ while the stock of corporate bonds in the financial system ___________.

[We rule out any vertical or horizontal curves]

	A.	decreases; decreases
	B.	increases; increases
	C.	increases; decreases
	D.	decreases; increases
	E.	may increase or decrease; may increase or decrease

Which of the following statements is NOT correct?

	A.	The RBA needs to shift the supply of ESF to the right when decreasing the cash rate target.
	B.	The RBA needs to inject ESF at the OMO in order to keep the supply at the same location if the autonomous factors drag the supply of reserves to the left (assuming demand for reserves have not changed).
	C.	The demand for reserves will shift to the left if the RBA announces a decrease in the cash rate target.
	D.	The RBA in March 2020 decreased the cash rate target twice.
	E.	All of the above statements are correct.