Posted: May 24th, 2016

Based on the article what is the key concern of the RBA which may result in it decreasing interest rates?

Interest rates: RBA pressured to flag more cuts
The Reserve Bank will come under pressure this week to flag further interest rate cuts to bolster Australia’s sluggish economy in the wake of sharp falls in global equity markets and a deteriorating outlook for world growth. The RBA board will meet for the first time this year tomorrow against a backdrop of mounting deflationary fears as the global oil price wallows at 13-year lows, and weakening growth prospects in the US, Japan and China, Australia’s biggest three trade partners…….
The ABS last week said Australia’s underlying inflation rate was 2 per cent in 2015, a little stronger than economists had expected but still affording the RBA plenty of scope to cut further.
Author: Adam Creighton; Economics correspondent, The Australian – February 1, 2016.
8a. Based on the article what is the key concern of the RBA which may result in it decreasing interest rates?
8b. What are the factors that determine whether such a policy will be successful?
8c. Can you explain why there seems to be a difference in opinion between the article in this question and the previous question (video) regarding the prospect of a rate reduction?