T6 EIC 3 (Lecture)
The current rate of Inflation has suddenly and unexpected collapse from 2% in the previous month, to 0.5% this month. (this is an extreme and alarming inflation decrease). Which one of the following is the most likely monetary policy and OCR rate change to be implemented by the RBA?

Question

T6 EIC 3 (Lecture) 
 The current rate of Inflation has suddenly and unexpected collapse from 2% in the previous month, to 0.5% this month. (this is an extreme and alarming inflation decrease). Which one of the following is the most likely monetary policy and OCR rate change to be implemented by the RBA?

Answer

expansionary monetary policy that reduces the OCR by 50 basis points.

Answer

expansionary monetary policy that increases the OCR by 25 basis points.

Answer

contractionary monetary policy that increases the OCR by 50 basis points.

Answer

contractionary monetary policy that reduces the OCR by 25 basis points.

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T6 EIC 3 (Lecture) The current rate of Inflation has suddenly and unexpected c...

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