ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Categories: Basic Concepts Economic Regulation Macroeconomics. By Burton G. Malkiel, POST: The rate of interest measures the percentage reward a lender receives for deferring the consumption of resources until a future date.

Detailed explanation-2: -Three variables determine interest rates: inflation rate, GDP growth, and the real interest rate.

Detailed explanation-3: -Another potential result of higher interest rates: Businesses may pull back on borrowing and investing, which means consumers and businesses would start spending less and eventually bring demand back down to a level that’s commensurate with supply.