Explain the link between the rate of interest and inflation, Microeconomics

Explain the link between the rate of interest and inflation.

Interest can be explained as the price of money - more expensive money will lead to few loans, higher saving and as lower investment and consumption. This will have a dampening effect on AD and therefore inflation.

 

Posted Date: 7/11/2013 5:54:33 AM | Location : United States







Related Discussions:- Explain the link between the rate of interest and inflation, Assignment Help, Ask Question on Explain the link between the rate of interest and inflation, Get Answer, Expert's Help, Explain the link between the rate of interest and inflation Discussions

Write discussion on Explain the link between the rate of interest and inflation
Your posts are moderated
Related Questions
The Long-Run Supply of Housing * Scenario 1: Owner-occupied housing - Suburban or rural areas - National market for inputs * Questions - Is this an increasing or co

Prove that the utility approach and the indifference curve approach yield the same consumer equilibrium.

Banks: A company which accepts deposits and issues new loans. It makes profit by charging more interest for loans than it pays on deposits, and through several service charges. By

Explain how diminishing returns differ from diminishing returns to scale. The answer should clearly distinguish among SR (one or more factors are fixed) and LR (where all facto

why risk averse consumers pay premium for insurance to convert an uncertain outcome to a certain one?



what are the values of real money supply and the current price level

The circular flow diagram is used to represent the interdependence that exists between sectors of the economy.  The diagram illustrates that there are various collections of same e

Question 1 Identify the basic postulates of economics Question 2 Discuss the role of price mechanism Question 3 Explain the shape and application of Engel curve