Q1. Assess whether the statement below is TRUE (always correct), FALSE (always wrong) or UNCLEAR (meaning correct under some circumstances, wrong under other circumstances to define)

Statement: The sale of Treasury bonds by the managed funds industry to the RBA during Covid-19 crisis created new money in the Australian payment system.

Q2

https://learn.uq.edu.au/bbcswebdav/pid-8639668-dt-content-rid-49033362_1/xid-49033362_1

Consider the statistics provided by the RBA columns A to H in the tab data in the following spreadsheet: f01d.xIs Using exclusively the concepts of the course and the data provided in the file above, answer BOTH questions. a) Consider the data for columns A to H in the tab data for the month of August 2019. Draw a very detailed market for reserves that is compatible with the data for August 2019. (1 mark) b) Consider the data for columns A to H in the tab data for the month of May 2020. Draw a very detailed market for reserves that is compatible with the data for May 2020. Comment on the success of the RBA policy of cash rate targeting. (1.5 marks) c) Explain how long-dated government securities purchases by the RBA during Covid-19 crisis could explain the situation in b). (1.5 marks) d) Comment on how this programme of government security purchases may also explain the N/A data recorded in May 2020 in columns E to F. Use the other tabs in the spreadsheet file and the indicated website links to provide some rationales for the N/A data. (1 mark)