on Australia’s macroeconomic policy
In this report we will see that the reserve bank and the government implement policies independent of each other, while both working to improve the economy.
The reserve bank is in charge of the money flow, in the form of interest rates and reserves; the government influences the economy through things like tax reform, government spending, and transfers, all of these policies have an effect on unemployment and inflation.
Current conditions will show us the economy is slowing considerably mostly due to the events in the US, however the government has acted quickly to try to reduce the impact by implementing a discretionary fiscal policy to the amount of $10.4 Billion.
This report will work through the macro-economic policies that are in place at the moment in the form of monetary and fiscal policy, and how these policies are implemented. This report will discuss the impact these policies will have on the economy now and in the future.
Finally this report will give a brief description of the current turmoil affecting Australia’s economy.
Australia’s central bank is the reserve bank, and they have the responsibility of implementing our monetary policy, their aim is to give the greatest advantage to the Australian people (www.rba.gov.au).
The areas in which the reserve bank will resolve to control are:
• Stability of the currency
• Maintenance of full employment
• Economic prosperity of the Australian people
The reserve banks policy is to try to limit inflation to a target of 2-3% per annum, this target is not a strict perimeter there is room for fluctuations over the business cycle (www.rba.gov.au).
The reserve bank operates independently of the government and has the power to set the cash rate if it feels the economy is in need of adjustment, in order to do this the reserve bank needs to change the supply of... [continues]
Cite This Essay
(2009, 08). Report to the Imf on Australias Macroeconomic Policy. StudyMode.com. Retrieved 08, 2009, from http://www.studymode.com/essays/Report-To-The-Imf-On-Australias-225209.html
"Report to the Imf on Australias Macroeconomic Policy" StudyMode.com. 08 2009. 08 2009 <http://www.studymode.com/essays/Report-To-The-Imf-On-Australias-225209.html>.
"Report to the Imf on Australias Macroeconomic Policy." StudyMode.com. 08, 2009. Accessed 08, 2009. http://www.studymode.com/essays/Report-To-The-Imf-On-Australias-225209.html.