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What is 'Money Supply' and who sets it?
What are the objectives of the RBNZ? (4)
What has been the RBNZ's primary monetary policy tool since 1999?
What is 'Settlement Cash'?
What is the 'Official Cash Rate' (OCR)?
How often is the OCR set?
How much is the interest banks pay when they borrow money from the RBNZ?
How much interest do banks receive from their reserves at the RBNZ?
If the OCR is high, then banks will...
How does an increase in deposits improve the reserve ratio and ultimately influence interest rates in the economy?
Attract holding cash gets banks...
Borrowing from the RBNZ to settle up gets banks...
1. A Low OCR means...
2. A high OCR means..
Where does settlement cash come from?
When the OCR goes up, what tends to happen to the reserve ratio?
What is the point of having a reserve ratio?
For example 10%
Using arrows, explain what happens when OCR increases.
If the RBNZ expect inflation to increase in the future what will they do to the OCR?
(inflation getting above 3%)
What will the RBNZ do if they expect inflation to fall below 1%?
Does the RBNZ ever have control over the banks' reserve ratio?
What four things influence the money supply?
What is the only way we control money supply in NZ?
How do high market interest rates influence banks?
What is the 'Optimal Reserve Ratio' (ORR)?
What is the Quantity Theory of Money or Quantity Equation?
What does M . V = P . Y stand for?
What does PY represent?
What does MV represent?
If V & Y are held constant, what does that mean for M & P.
Monetarists advocate control the money supply for ...
