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How does RBA create money to buy government bonds from private banks? (1 mark) Define the cash rate. Make sure to specify who is the
- How does RBA create money to buy government bonds from private banks? (1 mark)
- Define the cash rate. Make sure to specify who is the lender and who is the borrower. (1 mark)
- The cash rate is currently held at 0.25%. Explain briefly the main mechanism used by the Reserve Bank of Australia to stabilise the cash rate. Would the RBA buy or sell government bonds, if it was resisting downward pressure on the cash rate? (3 marks)
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
