Why consumption and investment are dependent on short term int rates
Whyy not long term int rates???
GyaanBeginner
Macro economics
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In order to control inflation in the economy what will the central bank will do ????
They will use the contractionery monetary policy in order to cool the economy which means they want to reduce the consumption and business will suffer because their cost of capital will go up
whereas long term rates are dependent on real GDP growth rate