Interest Rates

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  • Interest Rates
    • If Interest Rates increase
      • Borrowing decrease and savings increase
        • people buy less general prices decrease
          • this slows down inflation
    • If interest rates decrease
      • Borrowing increaces and people save less
        • people buy more so general prices increace
          • this causes inflation
    • Interest rates are the cost of borrowing and saving
      • they are expressed as a percentage
        • they are set by the Bank of England
    • Imports
      • If interest rates increace our imports will increace as other products will be cheaper
      • If interest rates decrease our imports will increase
      • if interest rates increase our imports will decrease
    • Exports
      • if interest rates increase our exports will decreace
      • If interest rates decrease our exports will increase
      • as the intrest rate increases the pound gets stronger making exports more expensive

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