HSC Economics 2025 – 400 Free Practice Questions to Pass the Exam

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What has been the average inflation rate in Australia since the introduction of inflation rate targeting in 1996?

3.5% per annum

2.7% per annum

Since the introduction of inflation rate targeting in Australia in 1996, the Reserve Bank of Australia aimed to keep inflation between 2% and 3%. The average inflation rate that has been achieved during this period falls around 2.7% per annum. This target helps to provide a stable economic environment, guiding expectations and allowing for more predictable investment and spending decisions.

The other options reflect averages that are higher than what has been historically recorded, which would not accurately depict the outcomes of the inflation targeting policy. The chosen figure of 2.7% aligns closely with the effective economic management and the overall performance of inflation rates within the established target range set by the Reserve Bank of Australia. This balance helps to foster economic growth while maintaining consumer purchasing power, achieving the goals of inflation targeting effectively.

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5.6% per annum

4.2% per annum

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