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Open Market Operations

Open Market Operations

Assessment

Presentation

Social Studies

11th - 12th Grade

Practice Problem

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Created by

Mr Brennan

Used 2+ times

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1 Slide • 5 Questions

1

Open Market Operations

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2

Multiple Choice

The cash rate is

1

The interest rate the RBA charges banks on overnight loans

2

The interest rate the RBA pays to banks on overnight deposits

3

The interest rate banks charge each other on overnight loans

4

The interest rate banks charge individuals on overnight loans

3

Multiple Choice

ANZ's exchange settlement account is

1

A bank account into which the RBA provides money for banks to lend out

2

A bank account containing all of the funds ANZ has collected from customers' savings accounts

3

A bank account with the RBA that is used to convert Australian dollars into other currencies

4

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?

1

Buy new government securities

2

Buy second-hand government securities

3

Sell new government securities

4

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%?

1

Charge a lending rate of 2.25% and pay a deposit rate of 1.9%

2

Charge a lending rate of 2.1% and pay a deposit rate of 1.75%

3

Charge a lending rate of 1.75% and pay a deposit rate of 2.1%

4

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

1

Purchase government securities and raise the interest rate it pays on surplus funds in banks' exchange settlement accounts

2

Purchase government securities and reduce the interest rate it pays on surplus funds in banks' exchange settlement accounts

3

Sell government securities and raise the interest rate it pays on surplus funds in banks' exchange settlement accounts

4

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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