Week 1 TMV 3 - spend which will affect company’s revenues...

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The article listed below explains that increasing the discount rate will have a strong effect both directly and indirectly on companies. Increasing the discount rate may cause a series of events and factors that will influence both individuals and businesses. The first in the series of events is an increase of federal funds rate where banks increase the rates that they are charging their borrowers. This will obviously raise credit and mortgage interest rates. This will also decrease the amount of money customers can
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Unformatted text preview: spend which will affect company’s revenues and profits. Businesses will further be affected because they also borrow money from banks to not only run but expand their business. So if borrowing becomes too expensive, businesses may become reluctant to borrowing as much as they normally would. Less spending may affect the growth of the company which will lead to a decrease in profits. http://www.investopedia.com/articles/06/interestaffectsmarket.asp...
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This note was uploaded on 03/26/2012 for the course F1515 F1515 taught by Professor Stan during the Spring '10 term at Keller Graduate School of Management.

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