Reserve Bank of Australia Has Policy Response Flexibility, Governor Says

The transcript discusses the dual risks of insufficient action leading to persistent inflation and excessive action causing economic slowdown. It highlights the central bank's role in managing these risks through interest rates, despite their uneven impact on the community. The bank aims to maintain low inflation and economic welfare, with future interest rate decisions depending on global economic developments and household spending. The central bank meets monthly to assess risks and adjust policies as needed.

What are the two main risks discussed in managing the economy?

• Rising interest rates and falling asset prices

• Not doing enough and moving too fast

• Increasing wages and decreasing supply

• High inflation and low unemployment

How does the central bank aim to control inflation?

• By adjusting tax rates

• By regulating the stock market

• By changing interest rates

• By controlling government spending

What is one effect of changing interest rates on the economy?

• It directly changes the unemployment rate

• It affects asset prices and exchange rates

• It immediately alters government policies

• It has no impact on household spending

What factors influence the central bank's decision on interest rate changes?

• Cultural trends and social media influence

• Global economic developments and household spending

• Technological advancements and innovation

• Political stability and government elections

What is the central bank's target range for inflation?

• 3 to 4%

• 1 to 2%

• 0 to 1%

• 2 to 3%