Real Interest Rates
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Real Interest Rates

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    Sonia S.
    CD
    Sonia S.

    Who sets the nominal rate of interest ?.

    Debangshu C.
    IN
    Debangshu C.

    what is inflation?

    Emmanuel N.
    ZA
    Emmanuel N.

    Interest rate is a monetary policy to control the circulation of money in an economy for the purpose of controlling inflation. If there is too much money in the economy, the central bank raise interest rate on borrowing to discourage people as well as banks to borrow money. The central bank also increase interest rate on savings to encourage people as well as commercial banks to save more.

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