Question

“Long-term loans are riskier for lenders because they cannot accurately predict long-term economic trends.” What economic trends might this statement refer to? What impact would they have on interest rates?

Answer 1

The global and national economic indicaters. For example stability amd law and order. If the conditions for business are less suitable,people will not invest. That means there will be less money available. To utilize the unused funds, the central bank may lower the interest rate to make borrowing easier and savings difficult