Posted: May 24th, 2016

How does the lower Australian dollar contribute to inflation? What is the concern that this was unexpected rise?

Watch the following video clip (CPI: A surprise jump in inflation to a 2-year-high appears to have reduced the chances of further official interest rate cuts in Australia.) and answer the following questions.
link to video
7a. What were the underlying causes of the stronger than expected inflation rate? Did the article provide much evidence of why it increased? How does the lower Australian dollar contribute to inflation? What is the concern that this was unexpected rise?
7b. Explain how the underlying inflation rate influences the RBA’s position on changing interest rates.