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    Interest rates scenario

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    Help with the attached scenrio questions

    What decisions of Big Drive's shareholders, suppliers, and customers are affected by changes in interest rates, and how?

    When interest rates fall, are suppliers affected? How?

    How do changes in interest rates affect Big Drive's costs?

    Explain how changes in monetary variables other than interest rates affect Big Drive's decisions

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    https://brainmass.com/economics/exchange-rates/interest-rates-scenario-249968

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    What decisions of Big Drive's shareholders, suppliers, and customers are affected by changes in interest rates, and how?

    Changes in interest rates affect the following decisions:
    a. Shareholders
    • Whether to keep their funds invested in the stocks of Big Drive. Movements in the interest rate directly affect the movement in the stock market and in individual stocks including that of Big Drive. When interest rate increases, funds usually flow from the stock market to government securities, hence puts a downward pressure on stock prices.
    b. Suppliers
    • Whether to extend credit to the dealership including how much, how long and if interest will be charged. When interest rates are increasing, the opportunity cost of the supplier on the funds tied up in accounts ...

    Solution Summary

    The expert examines the interest rates scenario for Big Drive's shareholders.

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