Certain issues (listed below) and the Australian economy (1 Viewer)

[madboy1125]

How does India's and America's(US rerecovery) increasing economic growth affect the Australian economy?

How does the rba increase inflation?

Thanks
-Madboy1125

 

[madboy1125]

Bump

 

[madboy1125]

bump

 

[Raymondo]

The RBA can influence the Inflation rate by basically using monetary policy.
This is mainly pre-emptive monetary policy, and it's evident in the trends for Dixon & Riley Textbooks.
Monetary Policy = Short --> Medium term policy to reduce/increase the inflation rate.

When Inflation increases, RBA tightens the monetary policy (leads to an increase of I/R) which restricts growth.
[You can find the reasons in the Economic Growth Chapter. Higher Interest Rates = Lower Business Capital Investment + Lower Consumption by Individuals in the economy]

Likewise for increasing inflation. (Mainly for restricting growth when there's a major cyclical boom in the eco)

 

[Pinioned]

hey viraj