Suppose that you have been commissioned by a government organization to study the effects
of the cash rate (the official target interest rate) in Australia post GFC. Collect information on
cash rate decisions and yearly data from 2008 to 2019 for the cash rate. Write a brief report,
supported by appropriate figures and/or tables, in which you (in no more than 800 words):
a) Discuss how the GFC contributed to the changes observed in the cash rate since 2008,
especially in the last 3 years.
[ 10 marks ]
b) Explain why the cash rate is now at a record low.
[ 10 marks ]
c) Provide your forecast regarding the Reserve Bank of Australia’s future policy
decisions regarding the direction of change in the cash rate for 2020.
Sample Solution