Cash Rate diagram (1 Viewer)

[laracroft]

wha the hell is a cash rate diagram...sorry if i sound stupid, but i have no clue wat this is,
can ne1 direct me to where i can find 1???
thnaks

 

[i-color]

It's the demand and supply of cash in the short term money market diagram, where you have your supply (which is vertical since RBA has monopoly power over supply of cash) and your demand which is downward sloping.

The equilibirum point determines the cash rate and the quantity of cash in the short term money market

 

[ToO LaZy ^*]

hmm..i've never seen this diagram too..

 

[laracroft]

thanks for that...when will i be able to use that? when im tlaking bout interest rates and that?

 

[i-color]

If you look in the 2003 hsc eco paper, that diagram is in the short answer questions on page 16......so i think you would have to know it........it's your demand and supply for cash diagram that you should have learnt in year 11 when doing financial markets