Understanding Cash Rate and Risks

Understanding Cash Rate and Risks

12th Grade

20 Qs

quiz-placeholder

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Understanding Cash Rate and Risks

Understanding Cash Rate and Risks

Assessment

Quiz

Social Studies

12th Grade

Practice Problem

Medium

Created by

Yapa Bandara

Used 3+ times

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20 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a primary tool used by the Reserve Bank of Australia (RBA) to implement monetary policy?

Setting the company tax rate

Adjusting the cash rate

Regulating petrol prices

Controlling export quotas

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the cash rate?

The interest rate charged on personal loans

The interest rate on credit cards

The overnight interest rate on unsecured loans between banks

The rate at which the government borrows from the public

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does an increase in the cash rate typically affect borrowing costs for households and businesses?

It decreases borrowing costs

It has no effect on borrowing costs

It increases borrowing costs

It only affects government borrowing

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following best describes credit risk?

The risk that a bank will not have enough cash to meet withdrawals

The risk that a borrower will fail to repay a loan

The risk of changes in interest rates

The risk of currency fluctuations

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How can a higher cash rate impact credit risk for banks?

It reduces credit risk by making loans cheaper

It increases credit risk as borrowers may struggle to repay more expensive loans

It eliminates credit risk entirely

It has no impact on credit risk

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is liquidity risk in banking?

The risk of losing money due to exchange rate changes

The risk that a bank cannot meet its short-term financial obligations

The risk of a borrower defaulting on a loan

The risk of inflation rising

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following actions can help a bank manage liquidity risk?

Increasing long-term lending

Holding more liquid assets such as cash or government bonds

Reducing the number of staff

Raising the interest rate on savings accounts

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