Managerial Accounting

Running head: MANAGERIAL ACCOUNTING
Corporate finance
Name of the Student
Name of the University
Author Note

1
MANAGERIAL ACCOUNTING
Table of Contents
Answer to question 6:.................................................................................................................2
Requirement a)...........................................................................................................................2
Requirement b)...........................................................................................................................3
Requirement c)...........................................................................................................................4
Reference list:.............................................................................................................................6

2
MANAGERIAL ACCOUNTING
Answer to question 6:
Requirement a)
The financial market of Australia has been affected by the global financial crisis with
the development of such crisis in the credit market. Increased spread in the short term money
market was one of the manifestations of the crisis in the beginning of August, 2007.
Consequently, the financial institution increased their precautionary demand for cash which
was responded by the Reserve bank of Australia (RBA) by increasing the cash supply in the
system. Such increase in supply of cash had prevented the upward pressure that would have
been created on the cash which would have driven the cash above the target which the RBA
set in their decision of monetary policy (Reddy and Wong 2018). There was adjustment in the
exchange rate balance during the crisis period because of fluctuation in the demand for cash.
Such measure was taken by the bank to ensure that the cash has remained at target level.
Cash rate:
(Source: rba.gov.au 2019)
The above graph shows that the global financial crisis has resulted a significant fall in
the cash rate since year 2008. In response to the global downturn, the monetary policy was
eased by RBA that resulted in fall in cash rate to 3% in April, 2009 compared to 7.25% at the
beginning of year September 2008. However, the beginning of year 2011 marked an increase