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businesses will be more likely to expand their facilities
Agustina Macejkovic
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If there is an excess supply of money?
deposit more into interest-bearing accounts, and the interest rate will fall.
If there is a fall in the interest rate, _____.?
businesses will be more likely to expand their facilities
What happens if there is a fall in the interest rate?
businesses will be more likely to expand their facilities
What does the nominal interest rate mean?
A nominal interest rate is an interest rate that does not factor in the rate on inflation. Nominal interest rate could also refer to an interest rate that does not adjust for the full effect of compounding.
How does the real interest rate relate to the nominal interest rate?
A real interest rate and a nominal interest rate are quite similar. The only real difference between the two interest rates are that a nominal interest rate include the cost of inflation where as the real interest rate does not.
If there is an excess supply of money?
deposit more into interest-bearing accounts, and the interest rate will fall.
What are the Reasons for fall in money value?
Changes in fiscal policy Inflation rate Interest rate
If there is a fall in the interest rate, _____.?
businesses will be more likely to expand their facilities
What happens if there is a fall in the interest rate?
businesses will be more likely to expand their facilities
What is the definition of fixed interest rates?
An interest rate that remains constant throughout the agreed term. If changes in the goverment base rate occur where commercial rates rise or fall you wont be affected.
Why does your interest rate changes once in a while why does this happen?
The interest rates on savings tend to move in line with interest rates in the economy as a whole. So, if the Bank of England cuts its base rate, the interest rate on your savings will probably fall, too. But sometimes banks and building societies cut rates by much more than the fall in the base rate, or cut their rates when the base rate has not changed at all. This is because they also set interest rates on particular accounts to attract customers and cut them once they have enough customers.
Bonds usually sell at a premium when?
when interest rates in the general market fall. This makes the interest rate on the bond relatively more attractive.
How does subordination affect the interest rate on a bond?
Subordination affects the interest rate on a bond because it is unsecured and has lesser priority than that of an additional debt claim on the same asset. It has higher interest rate required to compensate for the higher risk. If interest rate has been increased the price of the bond will fall. If the price of the bond falls, the yield that can be earned will increase.
What is nominal interest?
Nominal InterestA nominal interest rate is the interest rate that does not compensate for inflation. This is used in relation to "effective interest rate" or "real interest rate."" Real Interest Rate = Nominal Interest Rate - Inflation Rate " Improvement suggested by Palash Bagchi.
What does the nominal interest rate mean?
A nominal interest rate is an interest rate that does not factor in the rate on inflation. Nominal interest rate could also refer to an interest rate that does not adjust for the full effect of compounding.
How does the real interest rate relate to the nominal interest rate?
A real interest rate and a nominal interest rate are quite similar. The only real difference between the two interest rates are that a nominal interest rate include the cost of inflation where as the real interest rate does not.
Why is a bond with a higher interest rate often considered a higher risk investment?
Bonds with a higher interest rate are often considered a higher risk investment because when interest rates rise, bond prices fall; conversely, when rates decline, bond prices rise. The longer the time to a bond's maturity, the greater its interest rate risk.
