+1-415-670-9189
info@expertsmind.com
Discuss the type of monetary policies implemented
Course:- Macroeconomics
Length:
Reference No.:- EM13732835




Assignment Help
Assignment Help >> Macroeconomics

The following table shows the movements of the cash rate in Australia since 2008. Discuss why the Reserve Bank of Australia (RBA) has moved the cash rate from 7% to an all-time low of 2.5 % in August 2013, and since than it has maintained this rate.

In your discussion, highlight the economic environment which influenced the rate determination, and discuss the type of monetary policies implemented. In your discussion, you are required to explain how the altering of the cash rate will influence key macroeconomic aggregates. Use the AD - AS framework to help illustrate your discussion.

Do you think the cash rate is likely to fall lower in the future, or do you think it is time the rate was lifted? Explain your reason(s).

Effective

Change in cash
rate

New cash
rate
target

 

Effective

Change in
cash rate

New cash
rate
target

Date

Percentage
points

Per cent

 

Date

Percentage
points

Per cent

6-Feb-C6

0.25

7

 

8-Feb-12

0

4.25

5-Mar-08

0.25

7.25

 

7-Mar-12

0

4.25

2-Apr-08

0

7.25

 

4-Apr-12

0

4.25

7-May-08

0

7.25

 

2-May-12

-0.5

3.75

4-Jun-08

0

7.25

 

6-Jun-12

-0.25

as

2-Jul-08

0

7.25

 

4-Jul-12

0

3.5

6-Aug-08

0

7.25

 

8-Aug-12

0

3.5

3-Sep-C6

-0.25

7

 

5-Sep-12

0

3.5

8-Oct-08

-1

6

 

3-Oct-12

-0.25

3.25

5-Nov-03

-0.75

5.25

 

7-Nov-12

0

3.25

3-Dec-03

-1

4.25

 

5-Dec-12

-0.25

3

4-Feb-09

-1

3.25

 

6-Feb-13

0

3

4-Mar-09

0

3.25

 

6-Mar-13

0

3

8-Apr-09

-0.25

3

 

3-Apr-13

0

3

6-May-09

0

3

 

8-May-13

-0.25

2.75

3-Jun-09

0

3

 

5-Jun-13

0

2.75

8-Jul-09

0

3

 

3-Jul-13

0

2.75

5-Aug-09

0

3

 

7-Aug-13

-0.25

2.5

2-Sep-09

0

3

 

4-Sep-13

0

2.5

7-Oct-09

0.25

3.25

 

2-Oct-13

0

2.5

4-Nov-09

0.25

3.5

 

6-Nov-13

0

25

2-Dec-09

0.25

3.75

 

4-Dec-13

0

25

3-Feb-10

0

3.75

 

5-Feb-14

0

25

3-Mar-10

0.25

4

 

5-Mar-14

0

25

7-Apr-10

0.25

4.25

 

2-Apr-14

0

25

5-May-10

0.25

4.5

 

7-May-14

0

25

2-Jun-10

0

4.5

 

4-Jun-14

0

25

7-Jul-10

0

4.5

 

2-Jul-14

0

25

4-Aug-10

0

4.5

 

6-Aug-14

0

25

8-Sep-10

0

4.5

 

3-Sep-14

0

2.5

6-Oct-10

0

4.5

 

8-Oct-14

0

2.5

3-Nov-10

0.25

4.75

 

5-Nov-14

0

2.5

8-Dec-10

0

4.75

 

3-Dec-14

0

25

2-Feb-11

0

4.75

 

 

 

 

2-Mar-11

0

4.75

 

 

 

 

6-Apr-11

0

4.75

 

 

 

 

4-May-11

0

4.75

 

 

 

 

8-Jun-11

0

4.75

 

 

 

 

6-Jul-11

0

4.75

 

 

 

 

3-Aug-11

0

4.75

 

 

 

 

7-Sep-11

0

4.75

 

 

 

 

5-Oct-11

0

4.75

 

 

 

 

2-Nov-11

-0.25

4.5

 

 

 

 

7-Dec-11

-0.25

4.25

 

 

 

 

 

 

 

 

 

 

 

Answered:-

Verified Expert


Preview Container content

It is the responsibility of Reserve Bank of Australia to formulate and implement the monetary policy. RBA is held responsible to control the money supply and price level and thereby bring economic stability in the economy.

Like Fed, RBA also sets the targeted inflation rate at the 2-3% level. RBA is accountable to monitor the economic performance of the economy and make a change in the interest rate if they feel spending level needs a change. Tightening or loosening the monetary policy is known as the “Monetary Stance”.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Macroeconomics) Materials
Barney retired from the Marlin Corporation where he worked for 25 years. Barney elects to receive his retirement benefits as an annuity over his remaining life, resulting in a
The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oil, and bags; last year FoodMax spent $2.8 million o
What would be the effective rate of protection on bicycles in China if China places a 50 percent tariff on bicycles, which have a world price of $200, and no tariff on bike
Use the demand curve to help you calculate the number of DVDs rented per month and the amount of consumer surplus derived at a rental price of $5.
Assume that the low-calorie frozen, microwavable food company from Assignments 1 and 2 wants to expand and has to make some long-term capital budgeting decisions. The compan
A welding machine that costs £4,600,000 is expected to have a life of 5 years and a scrap value of approximately £300,000. Depreciation is first calculated on the basis of the
What is the inflation rate in Home? In Foreign? What is the rate of change in the nominal exchange rate? Which currency is expected to appreciate? At what rate? Explain.
Home Depot, a home and garden supply store, offers a 10% discount to active and retired military personnel, reservists, and to their families. Home Depot certainly has some