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What effects have interest rates had on economic indicators like GDP, Inflation ,Unemployment and Balance of Payments in the last ten years?
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What effects have interest rates had on economic indicators like GDP, Inflation ,Unemployment and Balance of Payments in the last ten years? Title of Page Page Number Introduction 3 Background Knowledge 4 Transmission Mechanism 5 The Economics of Interests Rates 6- 7 How Interest Rates affect Economic Indicators 8- 15 Summary and conclusion 16- 17 Bibliography 18 Introduction In this investigation, I will set out to answer how interest rates have affected the main economic indicators such as GDP, Inflation, Unemployment and Balance of Payments over a period of ten years. I will begin by explaining the economic theory of how interest rates affect the economy and with the help of real economic data and graphs. I will attempt to evaluate how well the theory is working. Economic theory can only be tested in the real world where there are some many variables. Unlike other sciences, economic theory cannot be tested under laboratory conditions. Background Knowledge What are Interest Rates? Interest rates are the amounts which need to be...
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