Week6 Economics Case Study

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WEEK6 MACROECONOMIC ASSIGNMENT
Q5
A) RBA does not set the cash rate. The cash rate is determined by the supply and demand of funds in the overnight cash market. RBA influence the market by lending and borrowing loan in order to affect cash rate.

B) The RBA has meeting on the first Tuesday of every month except January and they have discussion on the cash rate. They will announce the decision at 2:30 pm after each Board meeting.

C) The last change in cash rate was on 6 May 2015. The RBA decided to lower the cash rate by -0.25 percentage point.

D) To achieve target,

Firstly, RBA has announcement to set expectation and adjust the money supply. The banks operates in the market every day to maintain the cash rate at the target(open market

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