Interest rates
What Interest rates means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Interest rates
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Check what you remember
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Reference: Pearson Edexcel
The cost of borrowing and the reward for saving, expressed as a percentage, charged by banks when they provide credit.
Higher rates raise borrowing costs, deterring investment, and reduce consumer discretionary income, lowering demand.
Topics that use Interest rates
- Role of banks in the economy (Pearson Edexcel A-Level)
- The wider economic environment (Pearson Edexcel A-Level)
Related terms
- Business investment
- Collateral
- Consumer spending
- Credit provision
- Economic growth
- Exchange rates
- Financial intermediation
- Inflation
Using Interest rates in the exam
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