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Document Type

Article

Abstract

Millions of people are affected by interest rates each day. Whether obtaining a car loan, a mortgage loan, or any other type of loan, the price one pays for this loan is ultimately the interest rate charged. Interest rates are also a factor for investors. The return (income) one receives from investing in bonds, stocks, and mutual funds will be determined by the interest rate or yield of these securities. In turn, interest rates will affect people's decisions in choosing the right opportunity (borrowing vs. investing) that will minimize costs or maximize returns. What many people do not realize, however, is how changes in the stock market or the money supply can affect the interest rate they will be charged on a loan, or receive on a particular security. This essay will examine these and other factors that influence interest rate fluctuations. Although much research has been done in this area, my goal is to provide a current assessment of factors that affect interest rates. In addition, this essay will reinforce previous conclusions and offer insight into recent fluctuations.

Publication Date

1991

Journal Title

Draftings In

Volume

6

Issue

2

First Page

19

Last Page

27

Comments

This issue is also considered v.7 of the initial publication series of Major Themes in Economics.

Copyright

© 1991 by the Board of Student Publications, University of Northern Iowa

Language

en

File Format

application/pdf

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