A rise in the inflation target by the RBA through monetary policy, means the:
A)aggregate demand curve shifts to the right
B)aggregate demand curve shifts to the left
C)aggregate supply curve shifts to the right
D)aggregate supply curve shifts to the left

Question

Quizplus · Accepted Answer

A rise in the inflation target by the RBA through monetary policy means that the RBA is willing to tolerate a higher rate of inflation, which is typically achieved through lower interest rates. Lower interest rates stimulate economic activity and increase aggregate demand, causing the AD curve to shift to the right.

A Rise in the Inflation Target by the RBA Through