Question

Changes in interest rates, wage rate and inflation rates are example of this.

A. HHI
B. Income
C. Viability
D. Education
E. Economic
F. Socioeconomic Factors
G. Technology
H. Taxes
I. Entrepreneurs
J. Sustainable​

Answer 1

Answer:

The Phillips Curve

A.W. Phillips was one of the first economists to present compelling evidence of the inverse relationship between unemployment and wage inflation. Phillips studied the relationship between unemployment and the rate of change of wages in the United Kingdom over a period of almost a full century (from 1861 to 1957), and he discovered that the latter could be explained by two things: the level of unemployment and the rate of change of unemployment.4 5

Phillips hypothesized that when demand for labor is high and there are few unemployed workers, employers can be expected to bid wages up quite rapidly. However, when demand for labor is low, and unemployment is high, workers are reluctant to accept lower wages than the prevailing rate, and as a result, wage rates fall very slowly.6

Answer 2

Answer:

Consumers and corporations both reduce spending when interest rates are rising. Due to this, both stock prices and earnings will decrease.

Explanation:

How do interest rates affect the economy?

• Both Favourable and unfavourable market consequences may result from changes in interest rates. In reaction to economic activity, central banks frequently adjust their target interest rates, raising them when the economy is extremely robust and decreasing them when it is lax.
• The Federal Reserve Board (the Fed), which is in charge of establishing the federal funds rate in the United States, is in charge of determining the target interest rate at which banks in the country borrow and lend money to one another. This rate has an impact on the entire economy.
• A change in this interest rate typically takes at least a year to have a significant impact on the economy as a whole, but the stock market frequently reacts to changes sooner.
• The Federal Reserve also determines the discount rate, which is the interest fee the Fed imposes on banks that borrow directly from it, in addition to the federal funds rate. It is typical for this rate to be higher than the target federal funds rate, in part to encourage banks to borrow money from other banks at the lower federal funds rate.

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