Explain the link between the rate of interest and inflation, Microeconomics

Assignment Help:

Explain the link between the rate of interest and inflation.

Interest can be explained as the price of money - more expensive money will lead to few loans, higher saving and as lower investment and consumption. This will have a dampening effect on AD and therefore inflation.

 


Related Discussions:- Explain the link between the rate of interest and inflation

Elasticity, What are the uses of elasticity’s to the public sector and priv...

What are the uses of elasticity’s to the public sector and private sector?

Policies for technological advance, Policies for Technological Advance ...

Policies for Technological Advance Without better technology, increases in capital stock generated by investment rapidly run into diminishing returns. And without improvements

Find contract curve, Consider two individuals  M and F who must split 20 un...

Consider two individuals  M and F who must split 20 units of good X and 10 units of good Y. Suppose we can represent M's preference with the utility function Um =X ^2 mYm and Fs

Absolute and comperitive advantage, If one person can produce 1 fish and 10...

If one person can produce 1 fish and 10 oranges per hour and works 5 hours a day.another person can produce 2 fish and 20 oranges per 2 hors and works 8 hurs a day then who has the

How does a firm maximize their total revenue, The definition of a price mak...

The definition of a price maker is states as “firm with some power to set the price bcoz the demand curve for its output slopes downward”, that in effect, mean those firms with a d

Welfare economics, what do you mean by social welfare function

what do you mean by social welfare function

Average product of a factor - short period analysis, Average Product (AP) o...

Average Product (AP) of a Factor: The productivity of a factor is often seen in terms of its average contribution. Although not very important in the theoretical discussions,

Construct the balance sheet of the the total banking system, Suppose a bank...

Suppose a banking system with the following balance sheet has no excess reserves. Assume that banks will make loans in the full amount of any excess reserves that they acquire and

Service levels in supply chain management, Service levels in Supply Chain M...

Service levels in Supply Chain Management Consider that a finished product is made up of five inventoried component parts. If the service level were 90 per cent or 0.9 for eac

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd