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Student Number; .................... First Name: ................. Last Name. .................... ECON100 Week 11 Quiz 9 Question 1 (2 marks) Explain the effect open market purchases have on the equilibrium interest rate. Question 2 (3 marks) State whether you agree with each of the following statements. Provide the reason. a. The main goal of monetary policy in Australia is full employment of the labour force. False: The main goal, is to keep the inflation rate between 2 10 and ?", and keep the unemployment b. Inflation targeting is when the Reserve Bank of Australia uses monetary policy with the aim of rate Low. keeping the inflation rate at an annual average of between 2 per cent and 3 per cent in the medium term . Agree: This helps the money to flow steady without any long term problems. C. The Reserve Bank of Australia can use contractionary monetary policy to lower interest rates to stimulate aggregate demand. Question 3 (5 marks) Use market for loanable funds graphs to explain the effect of a federal budget deficits on the equilibrium real interest rate and the quantity of loanable funds, and the quantity of saving and investment