Reference no: EM133163654

Question -

a) Market participants, including financial institutions, fund managers and corporations, must understand monetary policy setting impacts on economic activity and business cycle. A central bank will typically implement monetary policy settings in order to achieve certain economic outcomes over a business cycle. Briefly describe the intermediate target for monetary policy in Singapore and give examples of different economic indicators that may give an insight into the future stages of a business cycle.

b) Once Jaleel understand the monetary policy framework in Singapore, he also would like to explore the monetary policy in Australia. Explain to Jaleel how the reserve bank of Australia implements the monetary policy. Use the data provided to plot the interest rates on 2-year commonwealth government bond and 10 year commonwealth government bond from January 2020. Determine the shape of the yield curve by using one of the theories you know and share your opinion on whether the Australian economy is heading for a boom or for a recession. Explain your choice.