Regression Analysis - Interest Rate in Australia

The unemployment rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. Unemployment is termed as a major health of the economy and every country tries to reduce unemployment rate for sustainable growth. It is referred as the number of unemployed workers divided by the total civilian labour force. Every economy tries to ensure full employment in the country but there is the existence of natural rate of unemployment though nation tries hard to obtain full employment in the country.

Australia’s economic status can be assessed using a range of economic indicators such as unemployment rates, Gross Domestic Product (GDP), inflation rates and interest rates. The economy can affect Australian business’s greatly causing them to flow through the business cycle. The business cycle purpose is to describe the overall trends of the economy and can show growths of high or negative. The four stages in a business cycle are: expansion, this is when the economy has high demands; peak, this is the turning point of the expansions before the economy falls down. A contraction is when the demand for goods and services are low; and trough, is the opposite of a peak. To evaluate Australia’s current economic status factors such as unemployment

Determining the cash rate by the Reserve Bank of Australia establishes a number of different factors for the Australian economy. The RBA is responsible for controlling monetary policy and ensuring that Australia’s financial system is stable. In light of recent events that have impacted economic growth, the RBA has maintained a 2.0% cash rate, which affects the overnight rate for loans to commercial banks. Previously held at 2.25%, a decrease by 25 basis points brought down the cash rate to 2.0%, an all time low in the past decade. The RBA held an expansionary stance to promote investment and spending in the local economy in order to drive growth. It is recommended that the RBA maintain the current cash rate of 2.0% in light of consumer confidence

With a floating exchange rate, such as Australia's, supply and demand factors largely determine the dollar's equilibrium price. The exchange rate is sensitive to changes in both demand and supply, which can cause changes in the equilibrium exchange rate. Another factor, which can affect the supply and demand of Australian dollars, is intervention in the market by the Reserve Bank of Australia.

The Australian economy marks external stability as an important objective because it can influence other important aims such as economic growth, unemployment and inflation. External stability is the concept of sustaining a nation’s external accounts so that in the future, it is able to service its foreign liabilities and can avoid currency volatility. When looking at external stability, we must examine Australia’s balance of payments, which records all economic transactions between Australia and the rest of the world. Australia’s balance of payments has two components, which is the current account and the capital and financial account. The current account measures the receipts and payments for trade in goods and services, transfer payments and income flows, while the capital and financial account shows international borrowing, lending, purchasing and sales of assets.

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The Exchange rate is the amount one country will buy another country’s currency. The conversion of currency is not 1 dollar for 1 dollar. The exchange rate between Australia and America is $0.7676 for 1 Australian dollar. Exchange rates can change from day to day. Back in 2011 the exchange rate between Australia and the USA was 1 Australian dollar would buy 1.015 US dollars. It was almost 1 for 1.

This report will detail the state of the Australia economy using key economic indicators, and provide an analysis and pinpoint any economic problems. Using this information it will further provide recommendations how to apply the monetary policy in the short and medium term to help the Australian government achieve its main economic objectives. Finally it will state the effects of these recommendations using three outlined economic criteria.

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Volatility is the last element. The definition of volatility as defined by Goode and Ben-Yehuda (2009), the author pointed out that moral panics are unstable and tend to appear and disappear quickly, due to a decline in public interest or news reports changing a new topic. According to Witzleb (2011), the first Australian jurisdiction to legally recognize same-sex relationships emerged in New South Wales in 1999, all other states then implemented the similar reforms. However, the issue was less likely to controvert until the action taken by the conservative prime minister, John Howard. There is one evidence supported that the issue has gained increasing public concern and national traction, since the same-sex marriage was definitely illegalized

Good afternoon, allow me to introduce myself. I’m Braiden Simpson, advisor to the treasury. Thank you for inviting me here to speak to you today about the current economic climate and to discuss well-structured policies and strategies to ensure the sustained wellbeing and growth of the Australian economy. We are all aware that through the introduction of strong policies that stimulate economic growth, policies that protect jobs, encourage job creation and the need to keep our economy stable through well managed macro-economic policies are what is required to ensure a continued advanced Australian welfare. Macro-economic policies are concerned with policies issues and objectives that affect the whole of our economy, however there are three main

Economic impact is driven by factors such as the Exchange rates and the value of the Australian Dollar, the conditions of inflation and recession, the Cost of labour in the manufacturing sector, technological changes in manufacturing, the economic cycle and the political environment Kellogg’s has a company strategy to expand and increase market share and profit that is based on its fundamental strengths of being a Global cereal leader, Global snacks player and a emerging focus on frozen foods

Macroeconomic policies are policies that affect the economy as a whole with the aim of minimising fluctuations in the business cycle by using the two macroeconomic policies Monetary policy and fiscal policy to help with maintaining economic growth, minimising unemployment, containing inflation, improving the distribution of income and wealth and help the increasing issue of environmental sustainability. Sustaining a strong and steady level of economic growth has always been a major aim of the government as a stable economic growth is able to achieve economic and social objectives which include the stability of the Australian currency, achieving and maintaining full employment in Australia and a rise living standard . In order to have a trend rate of economic growth (3-4%) the government employs the use of macroeconomic policies. Monetary policy is controlled by the Reserve Bank of Australia and sets the Cash

Consequently we find the better model after dropping variables with the p-values more than 0.05. Model 5 is the best model which has all the significant variables and has lowest AIC value of 1478.82 and BIC value of 1513.17.

The objective of this chapter is to describe the procedures used in the analysis of the data and present the main findings. It also presents the different tests performed to help choose the appropriate model for the study. The chapter concludes by providing thorough statistical interpretation of the findings.