what happens when interest rate rises?

Q: rates affect business? Consumers?

A: Market interest rate plays extremely essential part in the business and customer spending in light…

Q: Interest rates increase.

A: The market in which the aggregate demand curve and aggregate supply curve interact to determine the…

Q: If government spending were increased, what would occur to interest rates

A: Government spending refers to the money spent by the government on things like health care,…

Q: What is current yield?

A: Investments in the economy are important for the development, progress, and growth of economies…

Q: Would a dollar tomorrow be worth more to you today when the interest rate is 20% or 10%?

A: Given the interest rates are 20% and 10%.

Q: What is the difference between Market and Inflation-Free Interest Rates?

A: Market and inflation free interest rate are entirely different concepts. Market is the place that…

Q: Describe how interest could be  good or bad, depending on the situation, and explain why interest…

A: If properly managed, a LOW INTEREST RATE can be beneficial. Low interest rates reduce demand for the…

Q: Real interest rates can be negative.  True  False

A: The real interest rate is the inflation adjusted interest rate. That is, inflation implies that real…

Q: When interest rates decrease, how might businesses andconsumers change their economic behavior?

A: The interest rate is the rate charged by the lender on the asset lend by them. The asset lend can be…

Q: Which situation leads to the distinction between nominal and effective interest?

A: If the compounding is more frequent than once per year, then the nominal and effective interest rate…

Q: What is the Sinking-Fund Factor?

A: The sinking fund factor is the calculation that tells the investor how much of an annuity payment…

Q: What is Effective interest?

A: Effective interest rate can be described as the interest rate gained or paid in actual on a project.…

Q: If the interest rate is 8%, how much households and firms will want to borrow?

A: The households and firms that want to borrow imply the demand for funds in the market. Thus we will…

Q: would bonds still be a good option for investment if interest rates are negative?

A: Negative-yielding bonds are monetary instruments that cause buyers to lose cash.  They are typically…

Q: What are Nominal Interest Rates?

A: Inflation refers to a continuous increase in the price of any commodity and service in the economy…

Q: How do interest rates affect bond yield and bond prices.

A: Bonds are a form of financial security in case of which the issuer owes the holder a debt. Borrowers…

Q: complete this sentence: High interest rates might might purchasing a house, but at the same time…

A: High interest effects both the borrower and lender in the different manner As interest rate…

Q: The relationship between the price of the bond and the market rate of interest rate? * a. Inversely…

A: Par value of a bond is the amount you will get at the time of maturity of the bond The market price…

Q: How do people typically respond to higher real interest rates? by saving less by paying more taxes…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is a balance sheet? What is net worth?

A: Balance sheet and net worth are part of financial analysis and accounting.

Q: Explain time and interest rate effect on future value?

A: Interest rate: It is the rate of earning in a specific time period on the investment.

Q: If the yield curve suddenly became steeper, how wouldyou revise your predictions of interest rates…

A: The yield curve represents the relationship between the yields of fixed interest securities and…

Q: What might cause interest rates to be low one year and high the next?

A: Interest rates are best thought of as the "cost of money." If a borrower wishes to spend more money…

Q: How can market forces of supply and demand affect interest rates and the economy

A: The demand and supply affect interest rates in the money market. The money market is the market that…

Q: Why are bonds somewhat risky to buy, even though they make predetermined payments based on a fixed…

A: Financial economics deals with the financial markets, their operations and functions, and the…

Q: Distinguish between Market and Inflation-Free Interest Rates?

A: The Market interest Rate, also called the nominal interest rate (i) is the rate which is not…

Q: How could people be persuaded to start saving for retirement?

A: Retirement planning is the process of putting money aside, investing it, and then distributing it in…

Q: Why is investment is a better option other than savings?

A: The income remaining from the consumption expenditure is termed as the saving of the people. It can…

Q: How the time based term effects interest rates and its yield curve?

A: A yield curve is a graph that compares the yields (interest rates) of bonds with similar credit…

Q: Describe what is Market interest rate?

A: The rate of interest which is determined by the interaction of demand for and supply of funds in the…

Q: What is the discount bond?

A: A bond is a financial instrument that specifies the financial obligation of the bond issuer to the…

Q: Give an example of an Interest Transaction?

A: Interest transaction would be any transaction which is associated with any kind of interest or…

Q: You hold a two-period bond that pays a coupon  at the end of each period. The interest rate is…

A: Holding a two-period bond, that pays a coupon at the end of each period with an interest rate of…

Q: What is a bond?

A: Bonds are fixed income securities and acts as a loan to a borrower. It is a kind of contractual…

Q: How is an Effective Interest Rate calculated?

A: The effective rate of interest is an important concept in economics.  The effective rate of interest…

Q: what are the economic goals of high-interest rate?

A: The interest rate is a proportion of the principal, which is the amount borrowed, that a lender…

Q: Raphael observes that at the current level of interest ratesthere is an excess supply of bonds, and…

A: The bonds and shares of a company will be purchased on the basis of the available information such…

Q: When the interest rate rises, bond values

A: GIVEN   the interest rate raise,bond values is

Q: What is the relationship between nominal and effective interest rates?

A: The interest rates refer to the rate at which the loans are given by the banks, or other lending…