Economics homework help again :P?

Question

Define the term 'cash rate'. What does this measure? Is it measured by tightening and contracting inflation rates or interest rates?

Answer 1

Cash rate means the interest rate on cash deposits - short term cash amounts cf bond rates - long term deposits.
The rate is measured in a % . This rate is increased to reduce spending (discourage spending - ie via credit) and encourage saving. Demand declines, preasure on prices declines too.
The opposite occurs if you have high unemployment and low inflation.