Role of the RBA

Question 1

What are the objectives of monetary policy?

Answer 1

Stability of currency
Maintain full employment
Promote economic prosperity and social welfare through economic growth.

Question 2

Describe the RBA’s objective of stability of currency.

Answer 2

Keep inflation at a healthy rate to preserve currency purchasing power and minimise variations

Question 3

Describe the RBA’s objective of full employment

Answer 3

Support growth to ensure full employment stays close to NAIRU.

Question 4

What is NAIRU?

Answer 4

Non-accelerating inflation rate of unemployment is a theoretical level of unemployment. The lowest level before inflation would rise.

Question 5

Why does the RBA seek to achieve low inflation and low inflationary expectations?

Answer 5

To assist businesses in making sound investment decisions.
To support jobs
Protect savings
Preserve currency value.