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Effect of Interest Rate changes

S

StevieG4captain

Member
Does anyone know why an increase in interest rates would cause sales to reduce??

Its one of the smart revise questions which acted produce, but it doesn't make sense to me why sales would be affected. Surely these are driven by market demand. I can see how interest rates increasing would reduce profits but not sales??
 
It increases saving by the public and reduces their disposable income by increasing mortgage and loan payments - hence reduced sales of businesses.
 
I thought as much

Sounds more like CT7 material than CT2 though
 
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