The RBA can stimulate the economy by _____, all of which shifts the aggregate demand to the _____.

Question

BlackTom AI · Accepted Answer

The question asks how the Reserve Bank of Australia (RBA) can stimulate the economy and how that action would affect aggregate demand (AD).
Option 1 states: 'increasing the money supply; left.' Increasing the money supply tends to lower interest rates and boost spending and investment, which shifts AD to the right, not to the left. Therefore this option misstates both the policy tool and its effect.
Option 2 states: 'increasing the interest rate; right.' Raising interest rates generally dampens borrowing and spending, leading to a decrease in AD, which would shift it left, not right. Hence this choice is incorrect because the mechanism and the direction are inconsistent.
Option 3 states: 'increasing the money supply; right.' Expanding the money supply lowers borrowing costs and stimulates consumption and investment, which raises overall demand in the economy; this is a correct description of how monetary expansion shifts AD to the right.
Option 4 states: 'decreasing the interest rate; left.' While decreasing interest rates tends to boost spending and AD, the option also claims a leftward shift, which contradicts the actual effect. This makes the statement incorrect on both the tool and the outcome.
In summary, only option 3 correctly identifies the monetary policy tool (money supply expansion) and the resulting directional shift in aggregate demand (to the right), while the other options mix up either the policy tool or the direction of the AD shift.

The RBA can stimulate the economy by _, all of which shifts the aggregate demand to the _.单项选择题

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The RBA can stimulate the economy by _____, all of which shifts the aggregate demand to the _____.单项选择题