Question: Please answer with diagrams where appropriate for the two marks. Proper structure sentencing please. Thank you (iv) Suppose the RBA wants to reduce long-term interest

Please answer with diagrams where appropriate for the two marks. Proper structure sentencing please. Thank you

(iv) Suppose the RBA wants to reduce long-term interest rates. Explain which of the following strategies is likely to have a larger effect on current long-term rates. (a) The RBA reduces the current value of the Cash Rate. (b) The RBA reduces the current value of the Cash Rate and indicates it intends further reductions in the future. (2 marks)

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