Other things are the same, a decrease in the price level motivates people to hold less money, so they lend more, and the interest rate falls.
<h3>What is an interest rate meaning?</h3>
The interest rate is the amount a lender charges a borrower and is a percentage of the principal—the amount loaned. The interest rate on a loan is typically noted on an annual basis known as the annual percentage rate (APR).
<h3>What is a low-interest rate?</h3>
A low-interest rate environment occurs when the risk-free rate of interest, typically set by a central bank, is lower than the historic average for a prolonged period. In the United States, the risk-free rate is generally defined by the interest rate on Treasury securities.
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