Unformatted text preview: incidence of borrowing. Both of these should cause the bank to post higher profits in the future or slow their growth. This lag in growth would as expected be seen in the stock market through lower prices. 3) Bank loans – Due to the higher rate banks will be forced to borrow at they will likely increase the rate at which they lend money to borrowers. This should also cause customers to spend less money due to the lower amount of disposable income. Use and incorporate at least three sources, and list your sources. Sources: Money, Banking, and Financial Markets by Stephen G. Cecchetti, Second Edition, McGraw-Hill Irwin http://www.federalreserve.gov/pf/pdf/pf_complete.pdf http://www.federalreserve.gov/monetarypolicy/discountrate.htm...
View Full Document
- Spring '10