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Economic management — Question 5

QCAA 2022, Paper 1 · 1 mark

Q5 · 2022 · External assessmentUnclassified1 mark

QUESTION 5

Assume there is an increase in Australians preferring to rent rather than buy their own home. The effect on the transmission mechanism would be (ceteris paribus)

(A) a change to how the transmission mechanism is channelled.

(B) a decrease in the effective size of the transmission mechanism.

(C) quicker interest rate changes so banks maintain their profit levels.

(D) a shorter time frame for the cash rate to be transmitted throughout the economy.

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