Westonci.ca offers quick and accurate answers to your questions. Join our community and get the insights you need today. Experience the convenience of getting reliable answers to your questions from a vast network of knowledgeable experts. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.
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
Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.
