Chapter 15 Monetary Policy
1. Define monetary policy.
2. Who facilitates monetary policy in Australia?
3. How does the RBA influence interest rates in the economy?
4. What are the stances that the RBA can take in regards to monetary policy?
5. Explain what ‘loosening’ and ‘tightening’ of monetary policy is.
6. What are the objectives of monetary policy?
7. Why is it difficult for the RBA to achieve the objectives simultaneously?
8. Define inflation targeting and why it is used in Australia.
9. What are some of the indicators considered by the RBA?
10.What considerations that the RBA takes into account over the medium-long
term?
11. Answer Q. 3 on pg.305
12. What is the difference between ‘monetary targeting’ and ‘rate setting
monetary policy’?
13. Answer Q.1-3 on pg. 308
14. Copy diagram 15.1 on pg.307
15. Answer Q.1-3 on pg. 309
16. Discuss how changes in interest rates influence the level of economic
activity.
17. Examine how changes in monetary policy might impact on the value of the
Australia dollar.
18. Answer Q.1-3 on pg. 311
19. Outline how time lags influence the implementation of monetary policy.