+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
You have just won a lottery! You will receive $50,000 a year beginning one year from now for twenty years. If your required rate of return is 10 percent,
Consider the following labour market data and compute the followings (where relevant, show it to two decimal points). Calculate the percentage of people not in the labour forc
Discuss the role of logistics management in the aviation industry as it relates to controllable and uncontrollable risks by assuming you are a logistics manager for an aviat
Describe one major structure from above that is the most fascinating and explain why. In your explanation makes sure to describe the structure and explain why the Romans bui
Discuss and contrast how your Metropolitan Area and State employment and unemployment rates compared to the Rest of the U.S. by briefly summarizing the information within th
Even small items like dvds that used to ship for 2 or 3 dollars are now shipping for nearly 7 or 8 bucks. its not about the ebay auctions that work low price into shipping,
Calculate the equilibrium real wage rate and the equilibrium quantity of labor. Suppose that the nominal wage rate equals 60.  In the short-run, aggregate demand and aggrega
Consider an open economy with free capital mobility and a fixed exchange rate, using the Mudell-Fleming IS-LM model, explain the short-run effects of an expansionary monetary