Suppose you hear a stock broker state that when interest rates fall, the stock market tends to rise. Create a graph to explain this particular reasoning using the following
1. What are the axis?
2. Describe the slope - positive, negative?
3. What factors would cause a movement along the graph?
4. What factors might cause a shift in the graph?
The response address the queries posted in 597 words with references.
// As per the requirement, the paper will present a graph showing the Impact of interest rates on stock market values. The paper will also explain about the positive or negative slopes that have been obtained in the graph. It will also give the factors that cause movement along the graph and the factors that are responsible for causing shifts in the graph //
The graph given below depicts the impact of the interest rate on the stock market:
In the given graph, interest rates have been taken on horizontal axis I.e. X axis and the stock market has been taken on vertical axis I.e. Y axis. The graph explains that the changes in interest rates have sound affect on the stock market. It is a fact that any fluctuation in the interest rates will tend to increase or decrease the stock market. Hence, any variation in the interest rates has direct impact on the profits; if the interest rate is low, the cost of money is also low and the profit margin of the companies is high. The ...
The response addresses the queries posted in 543 Words, APA References.