RBNZ Sees 'Dramatic' Slowing in House-Price Growth

The video discusses the economic risks posed by COVID-19, particularly its impact on tourism in New Zealand. It examines the influence of house prices on consumer spending and monetary policy, predicting a slowdown in house price growth. The discussion extends to inflation trends and central bank policies, highlighting the role of government spending. The global economic environment is analyzed, emphasizing stable inflation expectations and the cautious approach of central banks.

What is one of the major international risks to the economy mentioned in the video?

• Trade wars

• Rising oil prices

• COVID-19 lockdowns

• Technological disruptions

How do lower interest rates affect asset values and consumer behavior?

• They lead to higher taxes.

• They have no effect on asset values.

• They increase asset values and encourage spending.

• They decrease asset values and reduce spending.

What is a significant factor contributing to the projected slowdown in house price growth?

• Decreased housing supply

• Higher taxation on housing investment

• Lower interest rates

• Increased population growth

What role does government spending play in the current economic environment?

• It is a minor factor compared to monetary policy.

• It has no impact on the economy.

• It plays a significant role in economic recovery.

• It leads to higher inflation.

What is the current global economic environment regarding inflation?

• Low and stable inflation

• Deflationary pressures

• High and unstable inflation

• Hyperinflation

How do central banks view the current inflation expectations?

• They are rapidly increasing.

• They are highly volatile.

• They are well anchored and stable.

• They are unpredictable.

What is a key reason for central banks' cautious approach to inflation?

• Lack of monetary policy tools

• High unemployment rates

• Confidence in stable inflation expectations

• Fear of deflation