Interest rates

• What does interest rates mean?


  The cost of borrowing money
• If interest rates get pushed up , how will it effect spending?

  Consumer and business spending will fall
• What do lower interest rates encourage?

  Economic growth and a fall in unemployment
• If interest rates rise how will this affect borrowing?

  Cost of borrowing will rise - May lead to costs of supplies increasing for a business
• What will happen if interest rates fall?

  The cost of lending falls which may lead to an increase in profit - costs less to borrow so less to pay back