Finance, Forex and Investments

How an increase in the price level changes interest rates?

Explain to me how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports? Okay, dumbbutthole. You didn't answer my question for shit. I already have my answer formed, I want a full answer to my question, not garbage such as what you have written here today.

Public Comments

1. Wow, why don't you take a couple of economics beginner courses for some basic theory? But, 1. interest rates generally are a cost for money that is borrowed. If the person lending is happy with the expected return and the borrower is happy to pay that amount that would be the agreed upon interest for that loan. Oh, this goes on forever and ever as you move to markets, macro economics, etc., so really sign up for some courses. Good luck
2. The lower the price level, the less money house holds need to spend on goods they want. They keep money in the banks These increase the supply of money in the banks, causing a rise in the market of loanable funds, lowering the interest rate. A lower interest rate encourages investment, as the rate at which they've to pay it back is low. A low interest rate in a country/ or euro zone, will cause people to buy more foreign assests instead of domestic ones, this increase the supply of the currency of that country, lowering the value of that currency. This increases exports from that area as exports are cheaper for other countries to buy and reduces imports. Also it the price level in a country fell but doesn't rise elsewhere. the demand for that countries exports will be higher, as they are cheaper, also demand for import goods will be lower as they are more expensive Dumbbutthole: if your so smart explain the Philips Curve or long run aggregate supply and demand or the fisher effect. Your answer you gave looks like it came from lecture notes you could barely understand