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Such loose fiscal policy is mainly due to Tax Reform. The Reserve Bank of Australia (RBA) warned the government that loose fiscal policy may well result in tightening monetary policy.
The upcoming election may start a tax-cut "bidding war". Fiscal policy works well in theory, but in reality it is also greatly influenced by politics. The warning from the RBA may deter loose fiscal policy in the fear of being blamed for interest rate rises (Mitchell 2000, pp1&6).
The macroeconomic issues in this article are the uses of monetary and fiscal policy in order to stabilise the levels of economic activity...
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