Monetary Policy

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Issue:

Miscellaneous

 

Written by:

Josh W

 

Date added:

June 2, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 943

 

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6881 times

 

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Essay content:

The goal of the Australian monetary policy is chiefly to keep inflation in between 2-3%. Monetary policy is generally referred to as either being an expansionary policy, or a contractionary policy, where an expansionary policy increases the total supply of money in the economy, and a contractionary policy decreases the total money supply...
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Expansionary policy is traditionally used to combat unemployment in a recession by lowering interest rates, while contractionary policy has the goal of raising interest rates to combat inflation. The inflation target is achieved through periodic adjustments to the RBA interest rate target. The interest rate used is generally the interbank rate at which banks lend to each other over night for cash flow purposes...
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