Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

https://www.rba.gov.au/publications/smp/2021/nov/ Section 3: Domestic Financial Conditions This question is based on your reading 'Statement on Monetary Policy'. Graph 3.12 indicates that the TFF is a

https://www.rba.gov.au/publications/smp/2021/nov/

Section 3: Domestic Financial Conditions

This question is based on your reading 'Statement on Monetary Policy'. Graph 3.12 indicates that the TFF is a Reserve Bank asset. Why is this?

Because the TFF is backed by gold

Because the TFF is the Reserve Bank's store of liquid assets.

Because the Reserve Bank extended 3-year loans to commercial banks.

None of the listed options is true

This question is based on your reading 'Statement on Monetary Policy'. Graph 3.13 shows that ESA funds represent a significant proportion of Reserve Bank liabilities. They are liabilities because

ESA's are used to store bank loans

ESA's are deposits accounts of commercial banks held by the Reserve Bank

ESA's are created when the Reserve Bank borrows currency

ESA's are created when the Reserve Bank borrows in overseas markets

This question is based on your reading 'Statement on Monetary Policy'. At the time writing, issuance of Residential Mortgage Backed Securities (RMBS) had recently increased. It followed the end of the TFF drawdown in part because

TFF drawdown was a source of funding for authorised deposit taking institutions (ADIs) and RMBS are an alternative source

ADIs were using TFF funds to purchase RMBS

TFF drawdown caused a rise in interests rates paid on RMBS

All of the listed options are correct

This question is based on your reading 'Statement on Monetary Policy'. See page 44. The shift in deposit mix during 2021 leading to higher levels of at-call deposits and a lower proportion of term deposits is

good for bank's funding costs because at-call deposits pay lower interest rates and good for bank's liquidity measures because at-call deposits are highly liquid

good for bank's funding costs because at-call deposits pay lower interest rates but bad for bank's liquidity measures because at-call deposits can be withdrawn at any time

bad for bank's funding costs because at-call deposits pay higher interest rates but good for bank's liquidity measures because at-call deposits are highly liquid

bad for bank's funding costs because at-call deposits pay higher interest rates and bad for bank's liquidity measures because at-call deposits can be withdrawn at any time

This question is based on your reading 'Statement on Monetary Policy'. From the perspective of lending institutions, which of the following statements is true?

Investor loans are considered higher risk than owner-occupier loans while principal-and-interest loans are considered higher risk than interest-only loans

Investor loans are considered higher risk than owner-occupier loans while principal-and-interest loans are considered lower risk than interest-only loans

Investor loans are considered lower risk than owner-occupier loans while principal-and-interest loans are considered higher risk than interest-only loans

Investor loans are considered lower risk than owner-occupier loans while principal-and-interest loans are considered lower risk than interest-only loans

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Macroeconomics

Authors: Lee Coppock, Dirk Mateer

2nd Edition

0393614093, 9780393614091

More Books

Students also viewed these Economics questions

Question

2. How do I perform this role?

Answered: 1 week ago