Business Economics Report: Efficiency, Market Failure, and Cash Rate

This business economics report provides a comprehensive analysis of key economic concepts. It begins by differentiating between allocative and productive efficiency, illustrating these concepts with diagrams. The report then contrasts positive and normative economics, explaining their distinct approaches. A section is dedicated to the production possibility curve, emphasizing the adaptability of resources. Furthermore, the report compares and contrasts perfect competition and oligopoly, highlighting the concept of excess capacity. It then delves into market failure, specifically focusing on externalities and their impact on market equilibrium. The second part of the report examines the impact of changes in the cash rate on the Australian economy, including discussions of monetary policy transmission, inflation, demand, employment, and investment, and reviews the Reserve Bank of Australia's decisions between 2010 and 2018, providing arguments for and against those decisions. The report leverages economic models and real-world examples to illustrate the concepts and support its arguments.