CSC Chapter 5 - Economic Policy

Fiscal policy

Informs government decisions around the use of its spending and taxation powers

Monetary policy

Government policy that attempts to manage the economy by controlling the money supply and thus interest rates

Fiscal agent

An organization that processes claims for a government program

Overnight rate

the interest rate on very short-term loans between commercial banks

Drawdown

The transfer of deposits to the Bank from the chartered banks, which effectively drains the supply of available cash balances from the banking system

Redeposits

Is a transfer of funds from the Bank to the chartered banks. This increase in deposits and reserves increases the money supply, which in turn decreases interest rates