State whether the statement are true or false

Question

1. If the SARB believes that inflation will increase, it will increase the interest rate?
2. To increase the interest rates in the economy the SARB will increase the repo rate
3. An increase in the repo rate will cause banks to charge a lower increase rate
4. An increase in the interest rate increases the spending by households and firms
5. An increase in the interest rate also decreases planned spending by households

Answer 1

1. True
2. True
3. False
4. False
5. True