Question
The Reserve Bank of Australia (RBA) had kept its benchmark interest rate at the all-time low of 0.10% since November 2020. With recovery from the
The Reserve Bank of Australia (RBA) had kept its benchmark interest rate at the all-time low of 0.10% since November 2020. With recovery from the COVID-19 pandemic underway, RBA expects real incomes to rise. To prevent the price level from rising, RBA plans to reduce the country's money supply this year. This means that if RBA succeeds in keeping the price level constant, compared to last year, the LM curve this year
a. will be flatter.
b. will be steeper.
c. will remained unchanged.
d. may be flatter or steeper depending on the extent of money supply increase.
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