Topic/s of Primary Focus: GDP, Unemployment and Inflation Aggregate Demand and Aggregate Supply
Money and Monetary Policy
(May also include content from previous topics.) Task:
Suppose that the Reserve Bank of Australia (RBA) decided to raise the cash rate
target. Explain how changing the cash rate target will end up impacting the
components of expenditure (C, I, G, NX), how that will impact Aggregate Demand, and
what impact that would have on price level (or inflation) and GDP.
Include an Aggregate Demand-Aggregate Supply diagram within your answer.
Explanation & Answer:
Unemployment and Inflation
Reserve Bank of Australia
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