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2.6 Macroeconomic objectives and policies

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Question 4

In response to a slowdown in economic growth, the Reserve Bank of Australia (RBA) decreased its official cash rate from 4.35% to 4.10%.

Draw an aggregate demand and aggregate supply (AD-AS) diagram to illustrate the likely impact of this decrease in the benchmark interest rate on the average price level and real national output.

An AD-AS diagram illustrating the impact of a decrease in interest rates

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2.6 Macroeconomic objectives and policies Questions

  1. A Level
  2. /Economics
  3. /2.6 Macroeconomic objectives and policies