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The interest rate is the price charged by a bank per year for lending money or for providing credit.

For firms, the level of interest rates is very important because:

It affects consumer demand, especially for goods bought on credit ­ if interest rates increase households decide to…

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Differences in inflationary expectations have the potential to cause costly industrial disputes that may damage a firm's reputation.

Created when the demand for labour has fallen relative to the available supply of labour.
Theory X managers might use the fear created from unemployment to force through cost saving…


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