How can market forces of supply and demand affect interest rates and the economy

If the default premium decreases, what is the effect on the consumption and savings of an individual consumer? If the default premium decreases, the individual consumer will her consumption and will her savings.

Do the financial institutions usually quote the interest rate on an annual basis?

Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Which curve will shift: supply or demand? In which direction will the curve shift: right or left? (It may help to use a demand and supply diagram to conduct your analysis.)  a. The number of people at the most common ages for home-buying decreases.    b. Rents rise extremely rapidly.  c. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.  d. Because of a threat of a war, people become uncertain about their economic future.The overall level of saving in the economy diminishes.  e. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.

If interest rates increase in financial markets, then...

What would happen if suddenly banks stop lending (this has happened in the past)? Can it grow?

Would the interest rate increase be more likely to hurt or help the financial institution’s profitability?

What group of people benefits from a higher interest rate? Explain how they benefit.

What is the relationship between interest rates and business investment?

Analyze how fiscal and monetary policies may impact retirement plans. 1. Research how changes in fiscal policy and monetary policy can impact retirement savings. 2. This research should include how changes in policies, including interest rates, tax rates, and policies that impact savings (IRAs, 401k), can impact retirement plans.