Interest rates, Managerial Economics

Interest rates

  • Decreasing the rate of interest may not encourage investment but increasing the interest rate tends to lock up liquidity in the financial system.
  • Governments may also be unwilling to put up interest rates because, as so many voters are house buyers, this is extremely unpopular.
  • With a large national debt to service, governments are less willing to raise interests rates as this will raise their own expenditure.
  • Finally, with so may foreign deposits in their monetary system (sector), each percentage rise in interest rates means a drain of foreign currency on the balance of payments.
Posted Date: 11/30/2012 4:40:10 AM | Location : United States







Related Discussions:- Interest rates, Assignment Help, Ask Question on Interest rates, Get Answer, Expert's Help, Interest rates Discussions

Write discussion on Interest rates
Your posts are moderated
Related Questions
LONG RUN OUTPUT In the LR whether or not the firm makes profit will depend on the conditions of entry.  For example, when surplus profits exist, there will be new entrants bec

Explain in brief the relationship between TR,AR and MR under perfect market condition.



Factors influencing the supply of a commodity a)         Own Price of the commodity There is a direct relationship between quantity supplied and the price so that the hig

Disadvantages of product differentiation   a) Product differentiation generally reduces the degree of competition in the market.  It does this in two ways:          i.

Airbus Boeing Demand P = 182.868 - 0.0003Q P = 198.6592 - 0.00013Q TVC Curve TVC = 104.8822Q - 0.001Q^2 + 0

The Learned Book Company has a choice of publishing one of two books o the subject of Greek mythology.  It expects the sales period for each to be extremely short, and it estimates

Assume a floating exchange rate system. The Fed pursues an expansionary monetary policy. Draw how this would look on the graphs below. Mark the new equilibriums. Complete the table

How does economic theory contribute to managerial decisions?