In 2020 at the Reserve Bank of Australia (RBA) decreased the target cash rate to 0.1 percent to enable the economy to recover from the severe recession caused by the COVID-19 pandemic. However, on 4th May 2022, the RBA increased the cash rate by 0.25%, to reduce rising inflation rate. Part A:What type of monetary policy did the RBA implement on 4thMay 2022? Outline the RBA's monetary policy transmission process, from the announcement through to real GDP.(5 marks)

Part B:The Australian dollar (AUD) started to appreciate against the US dollar (USD), after the RBA increased the cash rate on 4thMay 2022. Explainwhy and howthe AUD has been appreciating in reaction to the RBA monetary policy action. Your answer must include the actions financial investors in Australia and the United States. You may use the flexible exchange rate diagram above to illustrate your answer. Assume the initial equilibrium point is A.(8 marks).

k"> KOI [King's Own Institute : Succes X in T122 ECO100 Final Exam (45%) (F X Post Attendee - Zoom * M nespresso - at2218572@gmail.co x + V X moodle.koi.edu.au/moodle/mod/quiz/attempt.php?attempt=622292&cmid=157487&page=15# K > KOI E-Learning Library Academic KOI Student Teachers' Contact Administration Contact Web JP Calendar Website Portal List List Print Services Anil TAMANG Part A: What type of monetary policy did the RBA in Time left 1:40:11 ECO100_0122 4th May 2022? Outline the RBA's monetary policy transmission process, from the announcement through to real GDP. (5 marks) Grades USD/AUD Home Dashboard Calendar My courses Academic English Skills Chart Area INF100 ACC100_0122 BUS104_0122 Q1 Quantity of AUD ECO100_0122 Part B: The Australian dollar (AUD) started to appreciate against the US dollar (USD), after the RBA increased the cash rate on 4th May LSC100 2022. Explain why and how the AUD has been appreciating in reaction to the RBA monetary policy action. Your answer must Type here to search O m O EM 15 CADLEG 3:49 PM 6/8/2022