What is interest rate? Explain its role in finance and in the economy ?

2. What are the different reasons or purposes why people hold on to money? Explain each?

 3. How does interest rate affect the three kinds of demand for money?

4. How does interest rate affect the investment decision of businessmen?

5. How does the government use interest rate in controlling money supply?

6. What are the factors which affect the behaviour of interest rate?

 
7. What are the factors which affect the demand for bonds/assets? Explain the effect of each factor

8. What are the factors which affect the supply of bonds/assets? Explain the effect of each factor.

9. How does income level affect the interest rate?

 
10 How does price level affect the interest rate? 

11. Discuss each one of the theories regarding interest rate determination. Cite thelt limitations?

12. Discuss the determinants of interest rates and how they affect interest rates?

Answer rating: 100% (QA)

1 An interest rate is the cost of borrowing money or the return on investment for lending money It represents the percentage of the loan or investment amount that is charged or earned over a specific ... View the full answer