The monetary policy instrument the Reserve Bank chooses to use is the

Question

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The cash rate is the primary monetary policy instrument used by the Reserve Bank (of Australia, for example) to influence overall economic activity by setting the target interest rate on overnight loans in the money market. This rate indirectly influences other interest rates in the economy, affecting the behavior of borrowers and lenders, overall economic activity, and the inflation rate.

The Monetary Policy Instrument the Reserve Bank Chooses to Use