Q28.

The deposit multiplier is ________ when the reserve ratio is ________.

Select one:

a.large; large

b.large; small

c.small; small

d.the smallest; close to zero

Q29.

If the Reserve Bank of Australia sells bonds and securities in the open market, this is likely to lead to

Select one:

a.appreciation of the Australian dollar

b.negative balance on the Balance of Payments

c.none of the answers is correct

d.increase in investment spending by firms

Q30.

When people give up actively looking for work, other things being equal, the

Select one:

a.labour force participation rate increases.

b.unemployment rate increases.

c.working-age population decreases.

d.they are no longer counted as unemployed

Q31.

Because Australia is an open economy, RBA policies will have

Select one:

a.no impact on macroeconomic equilibrium because its polices will be offset by the movement in the exchange rate

b.a larger impact on the macroeconomic equilibrium compared to a closed economy.

c.a smaller impact on the macroeconomic equilibrium compared to a closed economy.

d.no impact on macroeconomic equilibrium because its polices will be offset by the capital inflows and outflows

Q32.

The crowing out effect of government spending will be less pronounced if

Select one:

a.none of the answers is correct

b.government borrows mostly in the international financial markets

c.consumption spending is more sensitive to changes in the interest rate

d.equilibrium GDP is further below potential GDP