In general, monetary policy can be said to be a tool that is used to manipulate the level of aggregate demand in the Australian economy. Whilst there are side effects for the Australian dollar and the ability of domestic wage and salary earners to satisfy their needs and wants, the main purpose is to control aggregate demand, and through that affect the rate of inflation that will be experienced in the near future.
However, whilst it is not an explicit goal of monetary policy, a change in the cash rate will have an affect on the efficiency with which resources are allocated. Economists in Australia assume that the market is the most efficient user of resources. When the market is left to operate freely, we assume that resources will also be used in their most efficient manner. However, we are also aware that the market is subject to failure, and above all it is subject to instability. Monetary policy can be used by the RBA in an attempt to “smooth out” these fluctuations, and as such the market is more likely to be allocating resources in a manner that we would consider efficient.
For example, when aggregate demand is low the economy may move into recession. At these times, unemployment will increase, and it is very unlikely that the output of the economy is approaching the productive capacity that is possible. As such, we can say that resources will be being allocated inefficiently. On the other hand, when aggregate demand is too high, the Australian economy may well be experiencing demand inflation. This will discourage consumption, and encourage speculative investment. Speculative investment occurs when people purchase assets in the hope that they will soon be able to sell them for a higher price. This type of investment does not add to the productive capacity of the economy, and as such it certainly will not be considered "efficient".
Ultimately, monetary policy can be used to directly influence the rate of unemployment, and as such the “labour resource” will be allocated more efficiently. As people are encouraged to maintain their economic habits in an environment of low inflation and consistent growth, the capital and land resources are also likely to be allocated in a more efficient way. It is important to remember that these factors also encourage investment spending on capital assets. This will add to the productive capacity of the economy, and as such it will certainly add to the level of efficiency.