The Role of Government in Australia (HSC SSCE Economics): Quizzes
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Practise the questions
10 questions from this quiz
What characterises bust periods in the business cycle?
What characterises bust periods in the business cycle?
Declining output & rising unemployment
What is the main outcome of effective stabilisation policies?
What is the main outcome of effective stabilisation policies?
Reduced amplitude of fluctuations
Which organisation conducts monetary policy in Australia?
Which organisation conducts monetary policy in Australia?
Reserve Bank of Australia (RBA)
What happens when the RBA buys government securities through DMOs?
What happens when the RBA buys government securities through DMOs?
Injects money, lowers interest rates
When should the RBA implement tight monetary policy?
When should the RBA implement tight monetary policy?
Economy growing rapidly with inflation
What typically happens to cyclical unemployment under tight monetary policy?
What typically happens to cyclical unemployment under tight monetary policy?
Rises as businesses cut production
When is loose monetary policy most appropriate?
When is loose monetary policy most appropriate?
Weak growth & rising unemployment
What does loose monetary policy successfully reduce?
What does loose monetary policy successfully reduce?
Cyclical unemployment
How long does monetary policy typically take to fully impact the economy?
How long does monetary policy typically take to fully impact the economy?
6-18 months
Why must the RBA be forward-looking when setting monetary policy?
Why must the RBA be forward-looking when setting monetary policy?
Time lags mean effects occur later