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Inflation is the rise in prices over a period of time. Inflation is one of the most important economic indicators as it combines the results of the unemployment rates, price stability and economic growth rates to create a clear indication of the state of an economy.
In 1993 the Australian Government introduced a target band of 2-3% for inflation. The Australian economy, at this point in time is at 4.2%, according to stimulus 4, which is well above the Reserve Bank of Australia’s target band. Price stability is the government’s attempt at maintaining a general level of prices within an economy; which is also an attempt at maintaining a moderate level of inflation...
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