Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Macroeconomics Policies And Their Effect On Australian Economy

tag 213 Downloads5 Pages 1,212 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT


Question 1

Using current economic data and analysing a number of leading, lagging and coincident indicators, determine Australia’s position on the business cycle. Justify you answer, including any relevant diagrams.
Question 2

a.) Which monetary policy is more effective in moderating the business cycle, tight or easy?  Give reasons for your answers.
b.) What is the current monetary policy stance of the RBA? What factors do the RBA take into consideration, before a decision is made as to whether to implement a tight or easy monetary policy?
c.) Using AD-AS model, explain how interest rates affect the key macroeconomic variables.
Question 3

a.) Comment on the recent factors that are affecting the value of the Australian dollar. Use diagrams to illustrate your answer.
b.) Who gains and who loses when the Australian dollar depreciates? Justify your answer.
c.) In your opinion, is a depreciating $A good or bad for the Australian economy? Justify your answer.


1. Business cycle refers to as a upward and downward movement of the gross domestic product (GDP) of the country. It is also known as the fluctuation in the economic activities within a period of time of a nation. It is usually measured for conducting the growth rate of real GDP. Business cycle is mainly describes as four phases that is prosperity, recession, depression, recovery (Hunkeler, 2000).

  • GDP growth of Australia:

The trend in GDP growth rates and the inflation rate of Australia are shown by the following diagram. In the GDP growth rate they commonly used the measurement of the economic growth. GDP can be calculated by the annual basis and it is the monetary value of all the finished goods and services. The annual growth rate of Australia for the e=year of 2013 was 1.8%, the GDP growth of Australia for the year 1992 to 2014 is shown.

(Luo, 2009)

  • Balance of payment:

In measuring the economic balance the international trade follows a significant role. BOP represents that the current condition of a country.  Balanced of payment is necessary to be achieved. The current balanced of Australia are shown in the diagram (Alawattage, 2009).

  • Inflation:

Inflation means the rise in price  it is necessary to see the overall increase in the general price index we should necessary to check the inflation rate. In the diagram the measurement of inflation are shown in terms of consumer price index of Australia (Bekaert and Wang, 2010).

The diagram indicate the global business cycle, we can see that Australia is in expansionary phase.

2. A. Monetary policy plays a important role in maintain the quality of money circulating in the economy, for altering the inflation and unemployment scenario in the economy , this trends help to moderate the business cycle , to moderate the business cycle government taken the effectiveness of the monetary policy (Pedram, 2011). An expansionary monetary policy also known as the easy monetary policy, to increase and decrease the money supply in the rate of interest. It is implemented during the recession phase of business cycle. During the inflation contractionary monetary policy is implemented.

B. The RBA is responsible for the Australia monetary policy. It involves setting the interest rate on overnight loans in the money market. The current position of Australian economy can be characterized by the moderate growth rate and decline in the investment spending. The reserve bank of Australia implemented a several monetary policies in the economy, it is accommodating in nature, and the target rate set by RBA is 2.5%. Thus RBI increases the demand to promote the growth of economy.

C. The AD-AS model means the aggregate demand and aggregate supply. The  output is X-axis and Y-axis which measured the national output and the price level. Due to change in the rate of interest it is also known as the aggregate demand.  An increase in the rate of interest would be on left side of the AD curve and fall would be lead to the rightward side of the curve. On the contrary a shift of the AD curve to the right causes the inflation rate as well as national output to increased.

3. a. The factors that influence the Australian dollar value are the growth rate of the economy, inflation rate, etc (Inducible mouse model for Alzheimer's disease (AD), 2013) , the following diagram shows the change that occur in the exchange rate market.

In this diagram, the demand curve shifts upward due to the increase in Australian dollar and also increase in the equilibrium quality. The demand curve shift downward due to the decreased in Australian dollar and also fall in the equilibrium quality.

This diagram shows the supply exchange rate quality. In this the supply increases and equilibrium quality also increase and supply decreased the equilibrium quality also decreased.

b. The value of the currency of country falls when there is the depreciation an increase in exchange rate above the equilibrium level.  This benefited to the home country while export and import become expensive. Thus the country who imported from the home country will lose and exported will be gain.

c. If there is depreciation in Australian economy the rate of exchange would be increase and the currency would be falls. This means Australian received more money when they exports and automatically it will increased the exchange rate. On the other hand, Australian imports become expensive as now Australia has to pay more for the same commodity when they purchased the exchange rate depreciation. Now depreciation occur when the increase in exchange rate  and then export increase and import falls.



Alawattage, U. (2009). Exchange Rate, Competitiveness and Balance of Payment Performance. Staff Studies, 35(1).

Bekaert, G. and Wang, X. (2010). Inflation risk and the inflation risk premium. Economic Policy, 25(64), pp.755-806.

Hunkeler, D. (2000). Life cycle profit optimization a business opportunity. The International Journal of Life Cycle Assessment, 5(1), pp.59-62.

Inducible mouse model for Alzheimer's disease (AD). (2013). Science-Business eXchange, 6(9).

Luo, L. (2009). Forecasting Growth of Australian Industrial Output Using Interest Rate Models. International Business Research, 1(2).

Pedram, M. (2011). Optimal monetary policy in the monetary union: effects on business cycles. OPEC Energy Review, 35(1), pp.90-117.


Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2016). Macroeconomics Policies And Their Effect On Australian Economy. Retrieved from

"Macroeconomics Policies And Their Effect On Australian Economy." My Assignment Help, 2016,

My Assignment Help (2016) Macroeconomics Policies And Their Effect On Australian Economy [Online]. Available from:
[Accessed 11 December 2019].

My Assignment Help. 'Macroeconomics Policies And Their Effect On Australian Economy' (My Assignment Help, 2016) <> accessed 11 December 2019.

My Assignment Help. Macroeconomics Policies And Their Effect On Australian Economy [Internet]. My Assignment Help. 2016 [cited 11 December 2019]. Available from:

For years now, is providing affordable essay help to millions of students worldwide. Our essay assistance services have helped us in assisting students with even the toughest essay assignments. We take pride in the fact that we cater the best assistance to search terms like help me with my essay. We offer affordable services in the fastest way possible. For our fast delivering services, students trust us with their urgent essay assignment needs. Two of our most popular essay writing services are maths essay help and English essay help.

Latest Management Samples

HDW524: Systems Installation And Maintenance

Download : 0 | Pages : 7

Answer: Introduction Intel is a type of microprocessor organization which is one of the oldest companies that provide many microprocessors. There is much application of Intel such as in computer systems, in electronic devices, automation, networking, image processing, and in robotics (Adams, Burger, Crawford, & Setter, 2018). The first microprocessor was established in the year 1971 and it is one of the largest organizations which pr...

Read More arrow

ACCT2005 Social, Environmental And Corporate Governance Analysis

Download : 0 | Pages : 10

Answer: Strategies, policies and guidelines of Qantas Company’s social and environmental performance Strategies, policies, together with guidelines in the operation of Qantas Airways are core values as it ensures that the company focuses on creation, enhancing, and protection values of shareholders. Strategies practices such as religious beliefs of people have ensured that the company work by obeying values of every individual. The prac...

Read More arrow

ISYS324: Business Analysis Faculty Of Law And Business

Download : 0 | Pages : 8

Answer: Introduction. The city of Parramatta has one of the best car park systems I have ever witnessed it works flawlessly with the help of computer automation. The car park system in the city of Parramatta is used across several car parks to be precise seven. This setup or framework is efficient in controlling traffic in and out of the car parks.It is usually very efficient and with minimal or no errors.As a result of this process being aut...

Read More arrow

ACCT2005 Financial Analysis For Qantas Airways

Download : 0 | Pages : 10

Answer: About Qantas Australia’s largest domestic and international airline, Qantas Airways restricted was supported in 1920 within the outback of Australian state. Qantas is one the foremost booming airlines company within the world with its robust whole image, well-tried safety records, operational dependableness and high client satisfaction rate each in Australia and within the international stage (Zhang, et al., 2018). The Qantas G...

Read More arrow

ECON6000 Economic Principles Decision Making

Download : 0 | Pages : 10

Answer: Introduction: This report is aimed to provide detailed information to the board of directors of the Schmeckt Gut in order to describe the change in demand proposition of their energy bar under the different income development, tariff rate development and inflation rate development. Through this report, different economic principles will be utilised in order to demonstrate the impact of the changes in the market situation and additiona...

Read More arrow

Save Time & improve Grades

Just share your requirements and get customized solutions on time.

We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits




Overall Rating



Our Amazing Features


On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.


Plagiarism Free Work

Using reliable plagiarism detection software, only provide customized 100 percent original papers.


24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.


Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.


Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

529 Order Completed

95% Response Time

Ivan Blank

PhD in Functional Human Biology

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

752 Order Completed

100% Response Time

Hugh Cleave

Masters in Human Resource Management (MMgt, HRM)

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

755 Order Completed

95% Response Time

Douglas Cowley

Masters in Finance with Specialization in Audit

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1265 Order Completed

97% Response Time

James Cook

Masters in Management

Wellington, New Zealand

Hire Me

FREE Tools


Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.


Essay Typer

Get different kinds of essays typed in minutes with clicks.


GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.


Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.


Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability




Your Approx Earning

Live Review

Our Mission Client Satisfaction

thanks for giving me quality work..................................................


User Id: 356016 - 11 Dec 2019


student rating student rating student rating student rating student rating

I must say that I am very impressed with the assistance here. I received a verrrrrry high grade which I am very pleased. The expert followed instructions exactly to the specifications of the Professor. Very well done. I am very impressed!


User Id: 80507 - 11 Dec 2019


student rating student rating student rating student rating student rating

They did an awesome job. I only had to go through and make minor, but that was no problem considering the quality of content I received.


User Id: 349107 - 11 Dec 2019


student rating student rating student rating student rating student rating

This was just what I needed!! paper turned out great! I would recommend to anyone who is in a bind and needs a quick fix to catch on work!!!


User Id: 355040 - 11 Dec 2019


student rating student rating student rating student rating student rating
Have any Query?