Question: Section II: Long run interest trends 1 . A paragraph explaining what we expect for interest rates in the future. In the future, we can
Section II: Long run interest trends
A paragraph explaining what we expect for interest rates in the future.
In the future, we can expect interest rates to rise in the short term as central banks, like the Federal Reserve, work to control high inflation. This means borrowing money will become more expensive for businesses and consumers. However, over the long term, interest rates are likely to stay relatively low. This is because the worlds aging population tends to save more, which keeps the demand for borrowing lower. So while rates might go up in the short term to fight inflation, they will likely not stay high for long, and we may return to lower rates as longterm trends like aging populations and high savings continue.
A graph or a graph and an equation explaining why you expect interest rates to decrease or increase in the long run. You must carefully explain the factors you listed in the previous paragraph affect the following:
a Public savings, Private savings, and National savings
b Investment
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