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The operation of monetary policy
Title: The operation of monetary policy
Category: Law & Government / Government & Politics
Details: Words: 1594 | Pages: 6.8 (approximately 235 words/page)
The operation of monetary policy
Monetary policy refers to actions by the Reserve Bank to influence the aggregate supply and cost of credit in the economy. The main tool of monetary policy is the Reserve Bankˇ¦s use of market operations to influence the cash rate or interest rate paid on highly liquid deposits in the cash market or short term money market. By influencing the cash rate, the Reserve Bank is able to indirectly affect the term structure of …showed first 75 words of 1594 total…
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…showed last 75 words of 1594 total…over the past two years have not effected inflation, the RBA remain unsure whether the inflation impact has been avoided or merely postponed. The RBA is also aware that the economy will be strongly effected by the implementation of GST next year, and if they consider it to be sufficient to underpin growth, it will be less inclined to ease monetary policy until a later date, or when clear signs of a slowdown is evident.
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