Business activity cycle, Finance Basics

Business Activity Cycle

The interest rates also depend on business cycles as above. Because the economy moves in the four (4) business cycles, such interest rates will shift like within economic recessions, short-term interest rates experience sharp decline than L.T interest rates. This is just because of the following reasons:

490_Business activity cycle.png

i. The CBK operates mainly in the S.T Sector (market) and its intervention has a major effect on S.T interest rates.

ii. L.T interest rates usually reflect the average supposed inflation rate over the next 10 - 20 years.

These expectations do not change usually because L.T interest rates are fixed because of debt covenants entered into throughout borrowing time.

Posted Date: 1/30/2013 3:10:48 AM | Location : United States







Related Discussions:- Business activity cycle, Assignment Help, Ask Question on Business activity cycle, Get Answer, Expert's Help, Business activity cycle Discussions

Write discussion on Business activity cycle
Your posts are moderated
Related Questions
Define the term - Right Issues If an existing company intends to raise extra funds, it can do so by borrowing or b issuing new shares. One of the most general methods for a

management and directors

On the 5 th of March 2009, the Bank of England (BoE) lowered its main interest rate to 0.5%, the lowest on record since the Bank has published rates in 1970, which still remains u

The following information pertains to Fairways Driving Range, Inc.: The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they will

Suppose an entrepreneur owns a firm which has two production opportunities. Technology A generates an output (net profit) of 10 in state 1, an output of 20 in state 2, and an outpu

Overlaps and Conflicts Overlaps - whenever attaining ONE MEANS achieving the another Conflicts - whenever attaining ONE CANNOT permit the achievement of another.


Attached is the file for your bond problem. Your group must use the following for the bond problem. In addition, using the general ledger software as described in the project i

explain the main sources of finance ?

Tarniwala and Dealer in Non-cleared Securities Tarniwala: He/she is a specialist or jobber in selected shares. He/she makes market i.e. provide continuity to dealings. They