Hani Jirovska Posted June 7, 2017 Report Share Posted June 7, 2017 Hi Can you please help me? I found this article online, but I dont understand something. http://www.bbc.com/news/business-39332826 How come that with a lower interest rate, the productiity falls? When interest rates are low, I would have thought that people will have more money to spend, therefore the aggregate demand increases and more people get employed. How come that the productivity of firms decreases then? Thank you for your answers Reply Link to post Share on other sites More sharing options...
Aya103 Posted July 16, 2017 Report Share Posted July 16, 2017 Here's my thought but I'm not sure, so you know how generally marginal profit peaks and then starts decreasing when there are too many workers. So perhaps the low interest rates are letting firms keep all employees as well as hire new ones which is thus causing marginal profit to decrease Reply Link to post Share on other sites More sharing options...
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