What do you think would be the impact on the exchange rate, the balance of payments, GDP, employment and inflation were the Reserve Bank to raise its policy interest rate (the cash rate) by 1 per cent (e.g. from 3.6 to 4.6 per cent)? Do you think it should do so?

Answer rating: 100% (QA)

If a central bank such as the Reserve Bank were to raise its policy interest rate by 1 percent several macroeconomic indicators would be affected Lets ... View the full answer