This website uses cookies to ensure you have the best experience. Learn more

Macroeconomics Questions And Answers Essay

1049 words - 5 pages

Question 1: (Word limit 500).

The inflation target of the Reserve Bank of Australia (RBA) is 1~3%. Suppose now the inflation is going up quickly and will be higher than this target soon. Moreover, the strong Australian dollar has started to hurt the Australian export. Please use what you have learnt from this unit to discuss whether it’s possible for the RBA to keep the inflation within the target and also to depreciate the Australian dollar. [10 marks]

Through utilizing inflation targeting, the RBA will usually raise interest rates if inflation appears to be above the target range of 1-3% in hopes of decreasing the inflation rate. The raised interest rates will then decrease the ...view middle of the document...

In the meantime, a greater money growth stimulates aggregate demand in Australia, due to lower interest rates which shifts price level to the right/upwards. As such, an expansionist monetary policy would depreciate the Australian dollar while increasing inflation.

Nevertheless, a depreciating Australian dollar does not necessarily cause inflation. Variables that affect the dollar value and inflation do not necessarily cause an inverse relationship between the two.
The RBA may utilize Contractionary fiscal policy to shift both the dollar value and inflation rate down. As the budget deficit lowers or if the government were to experience a budget surplus, local interest rate will decrease relative to foreign interest rates. Thus, the Australian dollar assets will become decreasingly attractive to investors in comparison with foreign assets, leading to a decreased demand for Australian dollar, which results in an depreciating dollar. In the meantime, a budget surplus lowers aggregate demand in Australia, exerting a downwards pressure on Australian prices. As such, a contractionary fiscal policy leads to a decrease in both the Australian dollar and inflation.

Question 2: (Word limit 1000).
In 2011, Japan was hit by a powerful earthquake. Using the tools that you have learned from this course, describe
a) how the Japanese yen moves (depreciation or appreciation against Australian dollar) and why; and what Japanese central bank can do to handle this crisis and how it will affect Japanese money market and foreign exchange market; [Hint: check what Japanese central bank did after the 1995 Kobe earthquake. You may use it as an example to support your analysis]; [5 marks]
Although theoretically, in the short term the Japanese yen should have depreciated in the wake of the earthquake due to an undesirable supply shock and decreased confidence due to predicted economic damage, which in turn would influence investors to remove yen assets to safer foreign currencies in order to minimize economic loss. This intern results in the depreciation of the yen as the money supply increases to purchase the assets sold, leading to decreased demand for the Japanese yen. thus ensuring that foreign currencies will generally appreciate relative...

Find Another Essay On Macroeconomics Questions and Answers

Religiological Questions and Answers Essay

1151 words - 5 pages questions/ would like more specific examples feel free to ask! 1. Epistemology- Inquiry into knowledge What constitutes valid knowledge and how to interpret that knowledge? What do you rely on in order to gain knowledge? What should be used to understand and properly interpret that basis of knowledge? Is there a basis for valid knowledge/ truth? The foundation of valid knowledge depends on one’s personal understanding. To “know” means to

Shakespeare questions and answers Essay

672 words - 3 pages Shakespeare Questions1. What are the principal sources of our knowledge of his life?There are a lot written about him, since there are too much different facts, we don't know which is correct.2. What is known of Shakespeare father? His mother?his fathers name was John Shakespeare. He was a glove maker a shop keeper and a bailiff.3. Mention the dates and places of Shakespeare's birth and death.he died in Stratford on April 23 1616 and was born on

Syria Questions and Answers

800 words - 4 pages Tica Drury 10/22/13 Period 3 Syria Country Questions FREAS 1. History of the protests a. When did the protests begin? Why did they begin? The protests began 15 March 2011. The president of syria, Bashar Assad, boasted that a revolution would never happen in his country, unlike Syria’s near by neighbors Egypt and Tunisia. President Bashar Assad was wrong however. His country was affected by the ever spreading Arab Spring/Uprising

Astronomy Questions and Answers

1986 words - 8 pages 5(a). What is the angle of the ecliptic with respect to the celestial equator? The angle of the ecliptic with the respect to the celestial equator is approximately 23.6 degree. It was measured by finding the intersection between the celestial equator marking and ecliptic marking, then zooming in to make these two marking straight, and finally measuring the angle of intersection by a protractor. 5(b). Explain why this ecliptic path exists

Accounting questions and answers

3250 words - 13 pages Q1. Why do businesses keep accounting records? What are the objectives of financial reporting? If accounting is based on numbers, why are ethics so important for accountants?Acct. is the information system that measures business activity, processes the information into reports and communicates the results to decision makersAcct. is the language of business with which business decisions are madeManagers of businesses use accounting info to set

International Relations Questions and Answers

2450 words - 10 pages Project Nikita Green IRLS 210 American Military University Mr. Arthur P. Drennan 1. There are some fundamental differences and similarities between IGOs and NGOs. To begin with, one definition of IGO is, “International/ transnational actors that are composed of member-countries” (Rourke and Boyer 2010, G–6). A few good examples of IGOs are the E.U., NATO, and the U.N. A definition of NGOs would be, “International (transnational

Questions and Answers about Baggages

2635 words - 11 pages Q1- What is the carry-on allowance? Passengers can bring only on bag as a carry on with the following dimensions: 55 x 35 x 25 cm. The weight goes from 5 kg for economy class and 10 kg to club economy and international flights Q2- How does Aerolineas Argentina Handle Special Items? Passengers that desire to transport fragile and big equipment on the cabin will have to buy additional seats with 12 hours in advance. Human organs can be

Questions and Answers about Allergies

2655 words - 11 pages Question 1: (Amani) It is very important for Physicians, researchers, and patients to understand the terminology used to define allergic diseases. Failure to do so can lead to inappropriate advice, prevention and ineffective treatment. The term allergy is commonly refers to reactions or conditions related to an IgE antibody-mediated immunological mechanism following antigenic exposure. Antigen is a material that is capable of initiating an

Sociology, Scenario Questions, and Answers

590 words - 2 pages basically going circles in my mind, it doesn't make it even worth coming.How might the surroundings affect the interview?The office being messy, cluttered, and dirty, would be a distraction to me, and would probably not benefit the interviewer with any resolution to precise answers. My concentration would be little to none.· You are at home when the incident takes place. You have been so busy that you have been unable to even tidy up the

Business Management questions and answers

635 words - 3 pages 1. What is the fundamental goal of business? Do all organizations share this goal?The fundamental goal of business is to earn a profit. Not all organizations share this goal because they are nonprofit organizations.2. Name the forms a product may take and give some examples of each.The forms a product may take are tangible and intangible. Tangible goods are computers, clothing, automobiles, and food. Intangible goods are services or ideas made

Business Management Questions And Answers

839 words - 4 pages 1. Distinguish between an absolute advantage and a comparative advantage. Cite an example of a country that has an absolute advantage and one with a comparative advantage.Absolute advantage is when a monopoly exists in a country when it is the only source and product of an item. Meanwhile, a comparative advantage is when a country can supply products more efficiently and at a lower cost than it can produce other items. South Africa has an

Similar Essays

More Questions From Answers: Belief And Reason

1015 words - 4 pages Surname 1NameProfessorCourseDateMore Questions from Answers: Belief and ReasonThe concept of God or gods presents a question of loaded terms, because this same word represents a global variety of belief systems regarding the existence of one or more gods- if any. Once a system of belief takes hold within a group of people, the believers usually start by explaining their beliefs, their reasoning, the source of their system, and how their religion

Questions And Answers: The Apple Of Your I Phone, I Pad, Ipod

988 words - 4 pages 5 Questions and Answers About The Apple Company

Abortion: Questions And Answers, By Dr. J.C. Willke

2074 words - 9 pages ways to do abortions. In the book, Abortion: Questions and Answers, by Dr. J.C. Willke, he divided the methods of abortion in to three categories: ones that invade the uterus and kill the child by instruments which enter the uterus through the cervix; ones that kill the preborn child by administration of drugs and then induce labor and the delivery of a dead baby; and ones that invade the uterus by abdominal surgery. I will go into more depth about

How To Write A Research Paper: Questions And Answers About Falcon Norhtwest

1417 words - 6 pages : Formulate Research Questions If I demand work for this company, I deem it essential to know more about the company. Beneath is a list of the questions I want to find the answers to when I do my research. • How large a company is ? • What does the company make, do, or sell? • Where is the company located? • What is its financial base/stability? • What is its mission? Step 4: Find Sources First Source: Falcon NW website If I worked for