Monetary Policy: Reserve Bank and Economy Flashcards
1
Q
Overnight Cash Interest Rate
A
The interest rate that clears the overnight cash market
2
Q
Base Money
A
The amount of currency in circulation plus the deposits in ESA
3
Q
Policy Reaction Function
A
Math representation of how Commercial banks adjust interest rates depending on the state of the economy
4
Q
Inflation Rate
A
Rate of increase in the general level of prices across the economy
