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In an Economy with No Inflation,explain Why Interest Rates Are

question 39

Essay

In an economy with no inflation,explain why interest rates are positive.


Definitions:

Cost Method

An accounting approach where investments are recorded on the balance sheet at their acquisition cost, without recognizing changes in market value.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without having control or joint control over those policies.

Cost Method

An accounting approach used for investments, where the investment is recorded at its acquisition cost and adjustments are made for dividends received and permanent declines in value.

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