Economics A-Level
Interest rates
What Interest rates means in Economics A-Level, as defined for AQA.
Definitions of Interest rates
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Reference: AQA
Commercial rates that banks determine using the base rate, affecting borrowing costs for consumers and firms and thereby consumption and investment.
Higher rates increase the opportunity cost of spending, incentivising households to deposit funds.
Topics that use Interest rates
- Central banks and monetary policy (AQA A-Level)
- The determinants of aggregate demand (AQA A-Level)
Related terms
- Aggregate demand
- Exchange rates
- Macroeconomic objectives
- Circular flow of income
- Credit creation
- Economic governance
- Economic indicators
- Financial stability
Using Interest rates in the exam
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