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a. What is the difference between the Australian budget deficit and Australian government debt?
b. In the dynamic aggregate demand and aggregate supply model, what is the result of aggregate demand increasing faster than potential GDP?
c.Explain, how the RBA would use the open market operations to achieve its policy goal described in part?
e.Briefly discuss the effect of a rise in the cash rate on consumption and investment spending.f. At various times in recent years, the major banks in Australia pursued their own interest rate policy and increased their interest rates by more than the amount by which the RBA increased the cash rate. Would such actions mean that monetary policy has become ineffective?
All four marker questions.
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