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The most efficient way is to get a hold on the inflation rate (without causing deflation) by influencing growth labour costs.
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What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
An increase in interest rates affects aggregate demand by?
An increase in interest rates decreases the aggregate demand shifting the curve to the left.
If expected inflation increases interest rates are likely to increase?
Yes, inflation and increases in interest rates usually go hand-in-hand, though inflation is not the sole cause of an increase in interest rates
What tends to result in an increase in the selling price of houses in an area?
An increase in mortgage interest tates.
What is the significance of interest Rates for an economy?
the significance is that the government profit from specific interest rates in an economy
How can increase in interest rate be prevented?
It depends what country you're in.Most commonly, the Central Bank has the right tools (decreasing general interest rate towards national banks) to prevent the increase in interest rates.
What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
Law related to Philippine monetary system?
The main laws to do with the Philippine monetary system involve interest rates and taxation. The government can alter interest rates to increase or decrease money flows.
An increase in interest rates affects aggregate demand by?
An increase in interest rates decreases the aggregate demand shifting the curve to the left.
If expected inflation increases interest rates are likely to increase?
Yes, inflation and increases in interest rates usually go hand-in-hand, though inflation is not the sole cause of an increase in interest rates
What tends to result in an increase in the selling price of houses in an area?
An increase in mortgage interest tates.
What would happen to the economy if the Government lowered interest rates?
Governments decreases interest rates so that, when interest rates are lowered, borrowings will be more cheaper, which would encourage investors borrow more money. This would increase investments in an economy, which would thereby increase production, demand for labor and thereby the average salary, which consequently leads to economic growth.
What is the significance of interest Rates for an economy?
the significance is that the government profit from specific interest rates in an economy
Does an increase in interest rates in the rest of the world lead to a stronger dollar?
could an increase in interest rates in the rest of the world will lead to a stronger U.S. dollar.
How are interest rates being affected in the auto industry?
Higher interest rates mean that the demand for cars have increased, due to an increase in consumer demand. Lower interest rates mean that there is a lower demand and the FOMC is lowering the rates to increase consumer demand. Lower rates, however could also increase the demand for cars. This is why the Feds have to higher the interest rates, to ensure that the supply and demand are at an equilibrium point.
How can interest rates influence AD?
reduce interest rates to increase incentive to buy/spend and hence increasing AD
How do interest rates affect people's purchasing decisions?
High interest rates increase the cost on the ability to buy a house or a car.
