answersLogoWhite

0

if an interest rate is high, it is likely that inflation is also high. Generally, one doesn't affect the other so much as measure the other.

User Avatar

Wiki User

15y ago

What else can I help you with?

Related Questions

How do interest rates and inflation affect real estate in south Africa?

explain how do intrest rates and inflation affect the real estate


Do interest rates rise when inflation declines?

Interest rates are simply the price of money. When inflation declines, interest rates typically decline also.


What is the relationship between interest rates and inflation?

Interest rates and inflation have an inverse relationship. When inflation is high, central banks typically raise interest rates to curb spending and reduce inflation. Conversely, when inflation is low, central banks may lower interest rates to stimulate spending and boost economic growth.


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


The Federal Reserve can indirectly affect the inflation rate. true or false?

True. The Federal Reserve can influence the inflation rate primarily through its monetary policy tools, such as adjusting interest rates and altering the money supply. By raising interest rates, the Fed can reduce borrowing and spending, which can help lower inflation. Conversely, lowering interest rates can stimulate economic activity and potentially increase inflation.


When you are earning interest is it better to have high or low rates?

High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.


How would low interest rates affect airlines?

Low interest rates positively affect airline industries because they lead to the investment of new technology and capital. This will increase the rate of return and increase the value of the infrastructure and services at lower costs, which will induce better quality and higher demand, which will financially benefit the airline industries with lower rates of inflation. High interest rates will actually increase inflation.


How does inflation impact the interest rates on loans?

Inflation typically leads to higher interest rates on loans. This is because lenders adjust their rates to account for the decrease in purchasing power caused by inflation. As prices rise, lenders charge higher interest rates to maintain the real value of the money they lend.


When inflation increases interest rates go .?

duck it


Which factors affect rate of interest?

Fist and fore most is NEED. Then the inflation. Third availability of money in the market i If the returns are less on the already made investments the availability of money will be less in the market. There by increase in the interest rates. Also changes in the economic condition will affect the interest rates.


Impact of recession?

high interest rates such as the repo rates and high inflation rate


Why would interest rates go up if inflation is high?

no

Trending Questions
The English version of preamble of the Philippines? What is a public good in economics and how does it differ from other types of goods in terms of consumption and provision? Why Of the worlds 20 largest economies the economy of the US has the least government involved and the fewest government services but the lowest taxes.? What did the Dow Jones close at on 12-31-2010? Is 100 percent employment a good thing for the economy? State the importance of break even analysis in business decisions? Why are nominations so important in the electoral process? What is trade activities means? What country is sto korun ceskych? Why does even a free enterprise market economy need some government intervention? what is it when information influences the economic decisions of users by helping them evaluate past present or future events or confirming or correcting their past evaluations? What corporate characteristic causes the rate of return and rate of equity percentage to be different? What was the median household income in the US in 1940? How do patterns of urbanization differ in developed and developing countries? What economic system is based upon Adam smiths ideas of supply and demand competition and the principles of hard work granting success? How might a leader's ability to carry out building projects be used to measure economic performance? How many U.S. Dollars is 10000 nickels? In addition to the advantage of increasing the nation's size what risks do you think acquiring all this land presented? Why does the government consider cottage and small scale industries so important? How much is 5000 cinco mil escudos worth?