RBA's Lowe: Possibility of Lower Interest Rates Remains on the Table

The transcript discusses a recent interest rate adjustment by the Australian monetary board, which was the first in nearly three years. The decision was not due to a worsening economic outlook but rather a belief that the economy could perform better. The analysis suggests that the Australian economy can sustain higher employment growth and lower unemployment. Monetary policy is highlighted as a tool to support the economy, but the transcript also emphasizes the importance of fiscal and structural policies to achieve full employment and economic prosperity.

What was the primary reason for the recent interest rate adjustment by the Australian monetary authority?

• A response to a worsening economic outlook

• A belief that the economy could perform better

• To increase inflation immediately

• To decrease household incomes

What is one of the expected outcomes of reducing spare capacity in the economy?

• Increased unemployment

• Higher household incomes

• Lower inflation

• Decreased job opportunities

How does the recent interest rate cut aim to support the economy?

• By decreasing inflation

• By reducing employment

• By increasing the cost of finance

• By boosting disposable incomes

What is a limitation of relying solely on monetary policy for economic improvement?

• It always results in higher interest rates

• It cannot address all economic challenges

• It has no effect on inflation

• It can lead to immediate full employment

Which policy is suggested as an alternative to monetary policy for achieving full employment?

• Monetary policy

• Trade policy

• Fiscal policy

• Immigration policy