This report examines the impacts of monetary policies on the Australian economy, prompted by OECD recommendations for raising interest rates. It utilizes the Aggregate Expenditure model to illustrate the effects of economic growth and housing market dynamics on aggregate demand and real GDP. The analysis extends to the static and dynamic AD-AS models to assess the consequences of the Reserve Bank of Australia (RBA) either following or disregarding OECD advice, particularly concerning inflation and economic stability. The report concludes that failing to adjust interest rates could lead to inflationary pressures, while premature rate hikes might hinder long-term economic recovery, emphasizing the complexities of monetary policy decisions in the Australian context.