The main tool that RBNZ uses to carry out monetary policy is the Official Cash Rate(OCR).
By decreasing OCR, people are less incentive to save,it cost less to borrow money,therefore, people will spend more on goods and services, thus consumption spending will increase, investment is taking place, contributing to an increase in the level of economic activity and growth, the level of unemplyment will fall.
By decreasing OCR, people are less incentive to save,it cost less to borrow money,therefore, people will spend more on goods and services, thus consumption spending will increase, investment is taking place, contributing to an increase in the level of economic activity and growth, the level of unemplyment will fall.
