answersLogoWhite

0

Declining interest rate can have some effect,like increasing unemployement Rate,increase poverty.

User Avatar

Wiki User

13y ago

What else can I help you with?

Continue Learning about Economics

How does the relationship between inflation, interest rates, and exchange rates impact the overall economy?

The relationship between inflation, interest rates, and exchange rates can impact the overall economy in several ways. When inflation rises, central banks may increase interest rates to control it, which can lead to higher borrowing costs for businesses and consumers. This can slow down economic growth. Exchange rates can also be affected, as higher interest rates can attract foreign investors, leading to a stronger currency. A stronger currency can make exports more expensive and imports cheaper, which can impact trade balances and overall economic activity. Overall, these factors are interconnected and can influence economic conditions such as growth, employment, and inflation.


What are 7 economic and social goals?

Full employment No inflation pirce stability reduced foreign debt budget surplus increase exports Sound domestic industry


What are some of the main causes for fluctuations in foreign currency exchange rates?

Some of the main causes for fluctuations in foreign currency exchange rates are differentials in inflation and differentials in interest rates. Others include currency-account deficits and public debt.


What are the factors that affects financial instruments?

Many factors affect the financial market, particularly the stock market. Examples include inflation and deflation, interest rates, foreign markets, and exchange rates.


What are the basic factors that determine the value of a currency and In equilibrium what is the relationship between these factors?

The value of a currency is primarily determined by factors such as interest rates, inflation rates, and economic stability. Higher interest rates typically attract foreign capital, increasing demand for the currency, while lower inflation generally preserves purchasing power. In equilibrium, these factors interact such that strong economic performance and stable inflation lead to higher currency values, while adverse conditions can depreciate a currency's worth. Ultimately, the balance between these factors influences exchange rates in the foreign exchange market.

Related Questions

How does the relationship between inflation, interest rates, and exchange rates impact the overall economy?

The relationship between inflation, interest rates, and exchange rates can impact the overall economy in several ways. When inflation rises, central banks may increase interest rates to control it, which can lead to higher borrowing costs for businesses and consumers. This can slow down economic growth. Exchange rates can also be affected, as higher interest rates can attract foreign investors, leading to a stronger currency. A stronger currency can make exports more expensive and imports cheaper, which can impact trade balances and overall economic activity. Overall, these factors are interconnected and can influence economic conditions such as growth, employment, and inflation.


What are 7 economic and social goals?

Full employment No inflation pirce stability reduced foreign debt budget surplus increase exports Sound domestic industry


What is foreign employment?

working baroad for earning money is called foreign employment


What foreign employment?

working baroad for earning money is called foreign employment


What has the author Wanjoong Kim written?

Wanjoong Kim has written: 'Impacts of exchange rates on employment in three Asian countries' -- subject(s): Foreign exchange rates, Effect of inflation on, Unemployment


When calculating a country's balance of payments do you use foreign aid?

foreign inflation rates


What are some of the main causes for fluctuations in foreign currency exchange rates?

Some of the main causes for fluctuations in foreign currency exchange rates are differentials in inflation and differentials in interest rates. Others include currency-account deficits and public debt.


What are the advantages of foreign employment?

He can mix and mingle with people of all nationalities and make himself at home in any country, melding in with other expats and enjoying different activities.


A major foreign concern for the Nixon administration?

inflation


What are the factors that affects financial instruments?

Many factors affect the financial market, particularly the stock market. Examples include inflation and deflation, interest rates, foreign markets, and exchange rates.


What has the author Jeannine N Bailliu written?

Jeannine N. Bailliu has written: 'Exchange rate pass-through and the inflation environment in industrialized countries' -- subject(s): Econometric models, Foreign exchange rates, Prices, Effect of inflation on, Inflation (Finance), Foreign exchange


Which foreign language helps in employment opportunity?

English...