ACCT2542 - monetary policy, which means increasing interest...

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“Evaluate the effectiveness of monetary and fiscal policy in achieving Australia’s current economic objectives” The current motive by the RBA is to maintain the current inflation rate to remain consistent within the 2-3% target through the use of medium-term objective monetary policy. Monetary policy refers to the use of interest rates to affect aggregate demand and stabilise the economy. It is the most effective way to control inflation. To lower inflation, the RBA must tighten
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Unformatted text preview: monetary policy, which means increasing interest rates. At this current moment, the RBA is using mildly restrictive stance of monetary policy leaving the interest rates unchanged at 4.75%. However, it is speculated that inflation rates will increase due to the expansion of the Australian economy hence increases in interest rates will be likely....
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This note was uploaded on 03/05/2012 for the course ACCT 2542 taught by Professor Knapp during the Three '11 term at University of New South Wales.

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