What happens when the cash rate goes up?

By Heidi Heck · 25 January 2022 · Economy

What happens when the cash rate goes up?

The RBA's Watering Can: What's the Impact?

Imagine your economy as a farm, with the cash rate as the lifeblood. When the RBA turns off the tap, what happens next?

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Summary

A policy analogy describes the nation as a farm. The RBA is in charge of irrigation on this farm. What happens when they turn the water off?