Question & Answer on ECON6000 Economic Principles And Decision Making Assignment
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- Referencing Styles : APA
- Words : 1750
- Course Code: econ6000
- Course Title: Economic Principles and Decision Making
- University: James Cook University
- Country: AU
Task You are required to consider the monetary policy that effectively is one of a 0% interest rate.
Even as recently as March 2021, the RBA has made it clear that it expects to keep interest rates at negligible levels for at least the next three years. Review the literature on the zero interest rate policy (ZIRP). Have other countries benefitted from ZIRP in the past, or has the policy led to unforeseen adverse outcomes? Weigh the possible benefits of a ZIRP in Australia (use the AD-AS framework) against the potential hazards (among the hazards, consider the impact on the housing market). You should obtain information from other sources in addition to the ones stated below.
(a) Australian Bureau of Statistics
(b) Reserve Bank of Australia
(c) Multinational agencies (e.g. the World Bank, the United Nations, the International Monetary Fund, or the OECD).
(d) Treasury.gov.au Report Structure Executive summary This section should include your essential findings and your key recommendations. Macroeconomic performance
a) Explain the current state of the Australian economy and the current monetary policy. Analyse how the growth of the Australian economy has been affected by COVID crisis. Analyse the impact of the low interest rate policy on the Australian economy. Use relevant statistical data, graphs and diagrams to support your arguments.
b) Explain, using evidence from other countries, the pros and cons of a ZIRP. Use relevant statistical data to support your arguments.
c) Postulate the impact of ZIRP on Australia over the next two years. Weigh the benefits and the costs (use a table to summarise)