Looking for reliable answers? Westonci.ca is the ultimate Q&A platform where experts share their knowledge on various topics. Get immediate and reliable answers to your questions from a community of experienced professionals on our platform. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.
Sagot :
A fixed interest rate of 8% with 1% inflation will yield the highest rate of return for a lender. Real interest rate and inflation premium are the two components that make up a nominal interest rate. The purchasing power of each dollar gradually decreases over time as an economy expands with inflation.
How Interest Rates Affect the U.S. Markets?
Both positive and negative market effects can result from changes in interest rates. Central banks frequently adjust their target interest rates in reaction to economic activity, boosting rates when the economy is excessively robust and decreasing rates when the economy is weak.
The Federal Reserve Board (the Fed) in the United States is in charge of determining the target interest rate at which banks in the country lend and borrow money from one another (known as the federal funds rate), and this has an impact on the entire economy.
The stock market frequently reacts to changes in this interest rate more quickly even though it typically takes at least a year for them to be felt widely across the economy.
To know more about 'Inflation', visit: https://brainly.com/question/8149429
#SPJ4
We hope this was helpful. Please come back whenever you need more information or answers to your queries. We appreciate your time. Please come back anytime for the latest information and answers to your questions. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.
