interest rates

Question 1

who sets base rate of interest

Answer 1

bank of england depending on how good the economy is

Question 2

low interest rates means

Answer 2

increased spending - cheaper to borrow money but get less when you save - meaning consumers have more to spend so demand of products goes up so more profit -

Question 3

high interest rates means

Answer 3

borrowing money is more expensive but savers get better returns - less money to spend - they will be trying to save more in order to take advantage - reduces demand for products - profits may go down - firms may not be able to afford for everyone to work for them so redundancies are made and unemployment increases