Interest Rates; Causes and Effects

Abstract: This 18 page paper examines careful the effects interest rates have on both a business and an economy directly and indirectly. The first part of the paper consider the effects of an interest rate change on a business, considering the direct impact on the companies own finances and the indirect effect due to the influence on its customers as well as the economy in general. The second part of the paper then considers the causes of interest rate changes and explains how the control of inflation may be seen as the principle use of interest rates as a controlling mechanism. This section also considers the role of supply and demand as well as the fisher effect on the economy and interest rates. The paper has been written with the Australian economy in mind, but can equally be applied to other economies. The bibliography cites 15 sources.

Filename: TEintrat.wps

Pages: 14

---

Catagory: Money & Banking / Corporate Finance

Subcatagory: Accounting & Personal Finance

---