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Interest Rate Raise vs Economic Recovery
Adam Sheikh
The Reserve Bank of Australia raised the cash rate by 25 bases point to 3.25%. Reason: the global economy is resuming growth. How far can a rise in interest rate contribute to the envisaged world economic growth?
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Conequences of an Interest Rate Raise / Cut on Economic Growth
venkataramanan, Financial Consultant, United States, Member An increase in interest leads to mobilization of savings i.e. capital formation.
While if this money would have been invested, an increase in production is achieved > more goods > more employment > economic growth.
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