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1 Introductory concepts 2  Market mechanism  3 Elasticities  4 Market structures 5  Market failures  6  Macro economic activity/eco growth  7 Inflation 8  Employment & unemployment  9  External Stability  10  Income distribution 11.Factors affecting economy  12  Fiscal/Budgetary policy  13  Monetary Policy   14 Aggregate Supply Policies  15 The Policy Mix

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monetary policy


Monetary policy is a policy operated by the RBA, on behalf of the government, that is designed to manipulate key financial variables in the economy (primarily interest rates) in order to increase welfare and prosperity for all Australians.  While monetary policy in many countries focuses on control of the money supply and the exchange rate, Australia is one of a number of countries that focuses on the manipulation of short term interest rates in order to influence economic activity. While the RBA retains the ability to manipulate the exchange rate in the event that it becomes volatile, it prefers the value of the AUD to be determined by market forces.


What are the goals of monetary policy?

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