KK1 - The purpose of AD side policy

Question 1

Purpose of AD side policy

Answer 1

To aid the achievement of Macroeconomic goals, moderate the effects of peaks and troughs

Question 2

Strong and Sustainable Economic Growth

Answer 2

Strong and sustainable economic growth refers to the highest rate of real GDP (3-3.5%) that is consistent with employment growth, but without running into any additional inflationary, external or environmental pressures

Question 3

Goal of Price Stability

Answer 3

Refers to the RBA’s specific inflation goal to contain the increase in Consumer Price Index (CPI) to 2-3% on average over time.

Question 4

Goal of Full employment

Answer 4

Refers to the lowest rate of unemployment (with no cyclical unemployment) that does not fall below the Non-Accelerating Inflation Rate of Unemployment (NAIRU) of approximately 4.5%.

Question 5

SSEG figures

Answer 5

5.9% (Sept 22) 2.7% (March 23)

Question 6

Current unemployment rate (March 2023)

Answer 6

3.7% (March 23), 3.5% either side

Question 7

Current inflation rate

Answer 7

7.8% (March 23) 6% (June 23)