The paper "Monetary and Fiscal Policy in Australia during the Last 10 Years " is a perfect example of a micro and macroeconomic case study. The Australian economy has progressively boasted of continuous success. This is has taken place even at times when the big economies of the world have been experiencing hard times during the recent recession and the financial crisis. Inflation has been a major characteristic of the falling economies and Australia has survived the wrath of the harsh economic conditions. But what is the reason behind the success of economic success? There are various policies that governments use to control the economies of their countries.
Two of the widely used policies are Fiscal and monetary policies. The Australian government has employed the use of both of the policies to achieve the economic strength it boasts of. For the better quarter of a century, the country has boasted of a stable economy which was proof of the recession and the financial crisis that has hit the world as opposed to other economies in the world. The monetary policy has been working for Australia for the time being.
The Reserve bank has over the years exercised its mandate of stabilizing the economy by utilizing a deficit. So far the country’ s economy has been able to stay afloat amidst the crisis, which means that the country should continue operating with the deficit rather than shifting to a Fiscal surplus. Over the time the country has operated with a deficit, it has been able to maintain inflation at a rate of 2%-3%, a very low figure as compared to other countries, increase the GDP to the constant growth of about 3.25% and reduce unemployment to the current state of 5.6% (Debelle & Stevens 2009).
According to these figures, it is evident that the government should continue operating with a deficit. This report gives an analytical approach to the use of the monetary policy and Fiscal policy in Australia and their effect on the Australian economy Introduction Achieving a stable economy is the aim of each and every country. For this reason, ever countries apply polices which aim at propelling the country economically. Policymaking bodies are present in different countries and the power bestowed to them varies from country to country.
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