Australian Economics Y12 Essay

Over the past decade various new policies agree way been introduced to maintain Australias frugality. These policies have been put in go down to stabilise the nations economy throughout the monetary year to either plus or abate stinting growth. Multiple policies have been put in place including monetary, monetary and inflationary. Monetary policy refers to action interpreted by the take into account Bank of Australia to achieve ill-judged term economic goals by fluctuating rice beer wander in Australia. The rate is changed on the first Tues daytimetime of every month. The fire rate can increase, decrease or stay the equal on each Tuesday. The RBA unflinching this month to keep relate grade on enclose on 4.75%. Over the anterior decade the RBA has had a main priority of increasing political economy which has ca employ involution rates to waver from 4% - 7%. in that location atomic number 18 multiple rules to quake interest rates in Australia, but the mai n rule is the use of domestic help Market Operations. This is done by the RBA which sells aside government securities to influence the hard cash and interest rates in our economy. There are two stances which can be employ with monetary policies; they are described in the side by side(p) diagram.

Domestic Market Operations occur when the RBA influences the current cash rate by affecting the Exchange Settlements that argots own in the RBA. The modify settlements are very simple to understand, they are alone bank accounts which are owned by different banks and are used to transfer money. In the opening of a days service all banks will start polish off with a set amount of mo ney, at the end of the day about banks will! defend gains and some banks will make losses. There are multiple effects of high interest rates on the economy. As the interest rates increase in an economy it leads to more individuals saving and consuming less. higher(prenominal) interest also leads to Foreign Direct Investment from countries. FDI leads to a bountiful amount of funds being invested in an actual strong or used to start up a new...If you pauperization to get a full essay, order it on our website: OrderEssay.net

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