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How will the changes in the interest rate impact the economy?

Changes in the interest rate can impact the economy in several ways. When interest rates are lowered, it can stimulate borrowing and spending, which can boost economic growth. On the other hand, when interest rates are raised, it can slow down borrowing and spending, which may lead to a decrease in economic activity. Overall, the impact of interest rate changes on the economy depends on various factors such as the current economic conditions and the reasons behind the rate adjustments.


What the role of interest rate in economic and what the good and bad effect of interest rate.?

what's effect on plabmid when gene of interest large size


What is a variable interest rate?

An interest rate that changes based on economic factors, such as T-Bills, LIBOR, and the prime rate published in the Wall Street Journal.


What is variable interest rate?

An interest rate that changes based on economic factors, such as T-Bills, LIBOR, and the prime rate published in the Wall Street Journal.


What is the rate of Risk-Free interest?

Risk-free interest is the rate of interest which exists when the expected risk of the economic transaction is zero. In most cases, the general interest rates in major banks of a country reflects the nominal interest rate, which is risk free. The real interest rate is simply the nominal interest rate minus the rate of inflation.


What factors that influence money supply?

inflation ,deflation, interest rate


Where do interest rates originate from and how do they impact the economy?

Interest rates originate from central banks, which set the benchmark rate for borrowing money. These rates impact the economy by influencing consumer spending, business investment, and overall economic growth. When interest rates are low, borrowing becomes cheaper, stimulating economic activity. Conversely, high interest rates can slow down borrowing and spending, potentially leading to a decrease in economic growth.


How does currency exchange work and what factors influence the exchange rate?

Currency exchange involves the buying and selling of different currencies. The exchange rate is the value of one currency in terms of another. Factors that influence the exchange rate include interest rates, inflation, political stability, economic performance, and market speculation. These factors can cause the exchange rate to fluctuate.


What is economic meltdown?

It is the going down on the rate of economic activity of a country. It basically refers to increase in borrowings by government.


How does the interest rate on new debt influence the use of financial leverage?

The higher the interest rate on new debt, the less attractive financial leverage is to the firm


Policies reducing levels of economic activity?

contractionary fiscal policy: reducing government expenditure and increasing taxation rate. Contractionary monetary policy: decreasing money supply and increasing interest rates.


What is sub-prime rate of interest?

It is one kind of interest rate lower than themarket interest rate for a target group. This type of interest rate was used in USA house mortgage loan to capture all the lower income people. This is the one significant cause of present economic crisis.