Interest rates impact investment from "summary" of The General Theory of Employment, Interest, and Money by John Maynard Keynes
The level of interest rates plays a crucial role in determining the level of investment in an economy. When interest rates are low, businesses are more likely to borrow money to invest in new projects or expand existing ones. This is because the cost of borrowing is lower, making it more attractive for businesses to take on debt to finance their investment activities. On the other hand, when interest rates are high, businesses are less willing to borrow money due to the increased cost of borrowing. This results in a decrease in investment activities as businesses are more reluctant to take on debt at higher interest rates. The relationship between interest rates and investment is a k...
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