Results for: negative-interest-rate

Why does the IS curve slope downward?

The IS curve is a negative slope, indicating that higher levels of output are associated with lower interest rates. The negative slope follows from the assumption that investment is inversely related to the interest rate. As the interest rate decreases… Full Answer

What are negative interest rates?

A negative interest rate is when the central bank charges banks a small percentage for depositing their money there. The hope is that this will encourage the banks to lend their money rather than keeping it and being charged. Full Answer

What does effective interest rate mean?

An effective annual interest rate considers compounding. When the principle is compounded multiple times each year the interest rate increased to be more than the stated interest rate. The increased interest rate is the effective annual interest rate. Full Answer

What is a fixed rate mortgage?

A fixed rate mortgage is a loan with an interest rate that does not change over time. Whatever the interest rate is when the loan is taken out, will be the interest rate for the entire duration of the loan. Full Answer