Increase the interest rate. High income interest rate on account balance. Photo Credit: Envato @iLixe48
Inflation also plays a critical role in determining interest rates, which are a key factor in any economy. Central banks, like the Federal Reserve in the U.S. or the European Central Bank in the Eurozone, often raise interest rates to combat high inflation. While this can help to control inflation, it can also lead to higher borrowing costs, making it more expensive for businesses and consumers to take out loans. This can stifle business expansion and investment, potentially leading to slower economic growth.
