The Australian Economy and Monetary Policy

Running head: ECONOMICS
Economics
Name of the student
Name of the university
Author note

2ECONOMICS
Table of Contents
The Australian economy............................................................................................................3
Question 1..................................................................................................................................3
Answer 2....................................................................................................................................5
Answer 3....................................................................................................................................6
Answer 4....................................................................................................................................8
Answer 5....................................................................................................................................9
Reference list............................................................................................................................11

3ECONOMICS
The Australian economy
The global economic expansion will be taking place and the rate of unemployment
will fall as the advanced economies are low. The economic growth can be termed as the
process where the real per capita income of the country will be increasing over a long period
of time. In the present years, the economic growth is termed as the basic issues. Economic
growth can also be stated as the rise in the total physical or real output for the human
satisfaction. The increase in the cash rate from 1.5 percent to 2 percent will be keeping
inflation within the target rate since the rise in the cost of borrowing will be discouraging the
spending. This will lead to low economic growth and low inflation. When the Reserve bank
Australia finds that the unemployment rate is quite high, it will be cutting down the cash rate
which will be expanding the business and create more jobs in future.

4ECONOMICS
Figure 1 Cash rate of Australia
Question 1
The Reserve Bank of Australia will try to formulate and implement the monetary
policy of Australia. The monetary policy decisions will be such that it is known to set the rate
of interest on the loans of the money market. The monetary policy usually implies those
measures that have been designed for ensuring an efficient operation of the economic system.
This particular policy is known to influence the level along with the composition of the
aggregate demand by manipulating the interest rates along with credit availability.