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b) In 7th Sep, for the fifth time this year, the Reserve Bank of Australia (RBA) increased the cash rate by 0.5%. The current cash

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b) In 7th Sep, for the fifth time this year, the Reserve Bank of Australia (RBA) increased the cash rate by 0.5%. The current cash rate is 2.35%. Explain to Leo how the monetary policy transmits to the overall economy. Explain how the high cash rate affects imports and exports in Australia and provide an example for your reason. c) Obtain weekly data from Refinitiv Eikon and plot the interest rates (bid and ask midrate) on 2-year commonwealth government bond (AU2Y-TBOND) and 10 year commonwealth government bond (au 10Y-TBOND) from June 2020. Determine the shape of the yield curve by using one of the interest rate theories you know and share your opinion on whether the Australian economy is heading for a boom or for a recession. Explain your choice. b) In 7th Sep, for the fifth time this year, the Reserve Bank of Australia (RBA) increased the cash rate by 0.5%. The current cash rate is 2.35%. Explain to Leo how the monetary policy transmits to the overall economy. Explain how the high cash rate affects imports and exports in Australia and provide an example for your reason. c) Obtain weekly data from Refinitiv Eikon and plot the interest rates (bid and ask midrate) on 2-year commonwealth government bond (AU2Y-TBOND) and 10 year commonwealth government bond (au 10Y-TBOND) from June 2020. Determine the shape of the yield curve by using one of the interest rate theories you know and share your opinion on whether the Australian economy is heading for a boom or for a recession. Explain your choice

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