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Fall in the cash rate on consumption

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Reference no: EM131991505

a) What are the effect of a fall in the cash rate on consumption, investment and net exports?

b) Suppose that the RBA uses an appropriate policy and is successful in keeping real GDP at potential in 2017. What type of monetary policy that the RBA should adopt, and what are the effects of the policy on real GDP, the price level and employment.

Reference no: EM131991505

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