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Topic: Business
Number of pages / Number of words: 4 / 1077
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The result will be decrease in output for companies with international sales.

Interest rates

Interest rates play an important part in business and individual investment and saving decisions. Interest rates are the main instrument of central banks to conduct their monetary policies.

Interest rates have impact on foreign exchange rates...


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Higher relative interest rates (??) attract higher financial investments in the short-run due to expectations for higher returns. The simplest way to explain this is to compare bank interest rates between two countries. If, in UK interest rates for deposits are 5%, compared to US deposit interest rates of 3%, then it will be economically sound for businesses to transfer their bank accounts to UK banks for higher returns...


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