According to the article, "MLC Asset Management economist Bob Cunneen said that given the Reserve Bank's forward guidance that interest rates won't rise above 0.1 per cent for the next three years or so, it has exhausted the conventional interest rate response to currency pressure." (a) In this case, Cunneen thinks that the RBA wants to [ Select ] the value of the Australian dollar. (b) If the RBA wanted to reduce the value of the Australian dollar, it would need to [ Select ] Australian interest rates. (c) If the RBA's strategy was to increase the value of the Australian dollar, it would have taken steps to cause [Select ] capital to flow into Australian financial markets.
The options are:
a) raise / reduce / maintain
b) increase / reduce / maintain
c) more / less / the same amount of
d) more / less / just as
e) shift to the right / shift to the left / no shift at all
f) shift to the right / shift to the left / no shift at all
g) an appreciation / a
![According to the article, "MLC Asset Management economist Bob Cunneen said that given the
Reserve Bank's forward guidance that interest rates won't rise above 0.1 per cent for the next
three years or so, it has exhausted the conventional interest rate response to currency pressure."
(a) In this case, Cunneen thinks that the RBA wants to
[ Select ]
the value of
the Australian dollar.
(b) If the RBA wanted to reduce the value of the Australian dollar, it would need to
[ Select ]
Australian interest rates.
(c) If the RBA's strategy was to increase the value of the Australian dollar, it would have taken
steps to cause
[ Select ]
capital to flow into Australian financial markets.
(d) A strategy of reducing the value of the Australian dollar via conventional monetary policy
would be [ Select ]
i difficult, if interest rates overseas were to rise.
(e) Were the RBA to want the value of the Australian dollar to be higher, they would need the
demand curve for the Australian dollar in the FX market to [Select]
(f) Were the RBA to want the value of the Australian dollar to be lower, they would need the
supply curve for the Australian dollar in the FX market to
Select ]
(g) If the RBA were to raise Australian interest rates while interest rates overseas were falling, this
would cause
[ Select ]
* of the Australian dollar.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feab19b59-ca62-4d3a-b330-d2ceaed4ac27%2Fabb87253-fd9d-49b2-ad79-40af3599f5f8%2F3dxzepg_processed.png&w=3840&q=75)
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(a) In this case, Cunneen thinks that the RBA wants to [maintain] the value of the Australian dollar.
(b) If the RBA wanted to reduce the value of the Australian dollar, it would need to [reduce] Australian interest rates.
(c) If the RBA’s strategy was to increase the value of the Australian dollar, it would have taken steps to cause [less] capital to flow into Australian financial markets.
(d) A strategy of reducing the value of the Australian dollar via conventional
(e) Were the RBA to want the value of the Australian dollar to be higher, they would need the demand curve for the Australian dollar in the FX market to [shift to the right, shift to the left, not shift at all] .
(f) Were the RBA to want the value of the Australian dollar to be lower, they would need the supply curve for the Australian dollar in the FX market to [shift to the right, shift to the left, not shift at all] .
(g) If the RBA were to raise Australian interest rates while interest rates overseas were falling, this would cause [An appreciation, a
Questions d, e, f, and g please.
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