

Open Market Operations
Presentation
•
Social Studies
•
11th - 12th Grade
•
Practice Problem
•
Medium
Mr Brennan
Used 2+ times
FREE Resource
1 Slide • 5 Questions
1
Open Market Operations
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2
Multiple Choice
The cash rate is
The interest rate the RBA charges banks on overnight loans
The interest rate the RBA pays to banks on overnight deposits
The interest rate banks charge each other on overnight loans
The interest rate banks charge individuals on overnight loans
3
Multiple Choice
ANZ's exchange settlement account is
A bank account into which the RBA provides money for banks to lend out
A bank account containing all of the funds ANZ has collected from customers' savings accounts
A bank account with the RBA that is used to convert Australian dollars into other currencies
A bank account with the RBA that is used to settle transfers between banks
4
Multiple Choice
How would the RBA cause the cash rate to increase?
Buy new government securities
Buy second-hand government securities
Sell new government securities
Sell second-hand government securities
5
Multiple Choice
Which of the following would the RBA do if it was targeting a cash rate of 2%?
Charge a lending rate of 2.25% and pay a deposit rate of 1.9%
Charge a lending rate of 2.1% and pay a deposit rate of 1.75%
Charge a lending rate of 1.75% and pay a deposit rate of 2.1%
Charge a lending rate of 1.9% and pay a deposit rate of 2.25%
6
Multiple Choice
In a downturn in the business cycle, the RBA would be most likely to
Purchase government securities and raise the interest rate it pays on surplus funds in banks' exchange settlement accounts
Purchase government securities and reduce the interest rate it pays on surplus funds in banks' exchange settlement accounts
Sell government securities and raise the interest rate it pays on surplus funds in banks' exchange settlement accounts
Sell government securities and reduce the interest rate it pays on surplus funds in banks' exchange settlement accounts
Open Market Operations
​

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