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Economic management — Question 8

QCAA 2022, Paper 1 · 1 mark

Q8 · 2022 · External assessmentUnclassified1 mark

QUESTION 8

Assume a central bank is concerned that house prices have increased in the past year. Which situation would be most likely to encourage the central bank to increase the official interest rate?

(A) Inflation increases from below 1% and housing approvals continue to rise.

(B) There is a short-term increase in house purchases causing current consumption to fall.

(C) There is a continuous increase in both house prices and consumer debt relative to wage growth.

(D) The housing price index increases in capital cities and does not change in other populated areas.

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