Stimulate aggregate demand in situations

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The cash rate in Australia has been at a level of 1.50% from August 2016 until 5 June 2019 when it was lowered to 1.25%. It was further reduced to 1.0% on 2 July 2019. Critics have been against further cuts in the rate as not beneficial to stimulating the economy. Keeping this in light, Give a view on whether it is worthwhile to use a combination of monetary and fiscal policy to revive the Australian economy?

Low interest rates or negative interest rates such as in countries like Japan reduce the effectiveness of monetary policy. Discuss alternative ways to stimulate aggregate demand in such situations.

Reference no: EM132405713

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