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the nominal interest rate) would have rinsed. Doubly, a higher increase should encourage consumers to save as a higher interest rate makes savings more attractive as the return on savings (interest) would have also risen. However as mentioned before this relationship is theoretically based and interest rates are not the sole influence on consumption. When applying to reality there are vast amounts of other variables which also attribute to consumption. Perhaps due to Australia’s steady economic growth for over a decade has boosted consumer confidence, as a positive future outlook (maybe an increase in future income) will incline consumers to consume more goods as they believe that they can repay any debt incurred in the future...
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