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Question 3 (10 marks available) A. What is the difference between fiscal policy and monetary
policy? (2 marks available) 8. Describe the goals of monetary policy? Discuss the monetary
policy transmission mechanism. (4 marks available) C. During the peak COVID-19 economic
crisis, the RBA reduced the cash rate to a historically low level. Do you think that the RBA was
concerned that the low interest rate would lead to a large increase in aggregate demand and
become inflationary? Explain. (4 marks available)

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  • 1. Question 3 (10 marks available) A. What is the difference between fiscal policy and monetary policy? (2 marks available) 8. Describe the goals of monetary policy? Discuss the monetary policy transmission mechanism. (4 marks available) C. During the peak COVID-19 economic crisis, the RBA reduced the cash rate to a historically low level. Do you think that the RBA was concerned that the low interest rate would lead to a large increase in aggregate demand and become inflationary? Explain. (4 marks available)