Business Finance
Grand Canyon Financial Institutions and Interest Rates Case Paper

Grand Canyon University

Question Description

Some individuals suggest that an increase in wages can be associated with an increase in interest rates. Apparently, this idea shows the tendency that the financial institutions would be committed to take part in the efforts to increase wages. Others argue that there is no any historical evidence that the financial institutions would be worried about wage increase. They also raise some important questions such as: How on earth would an interest rate to a proportion of above 4% would be allowed to exit in the first place? Who is the major influential entity to propagate the belief that any interest rate below 4% would be considered historically low, as if banks are created to amass income more than anybody? Where would the logic rest? The Fed is now determining interest rates in a fashion that facilitate conditions for the economy to take its proper course. So, upon proper recovery, would it mean the financial institutions could have the legitimacy to adjust the rate according to the public interest? How would you address these questions, which have been forwarded to all members of the course. 200 words. No title page needed.

Final Answer

Attached.

Running head: FINANCIAL INSTITUTIONS AND INTEREST RATES

Financial institutions and interest rates
Institution Affiliated
Date

1

FINANCIAL INSTITUTIONS AND INTEREST RATES

2

Interest rates represent the largest income earner to financial institutions. This includes all
the charges on principles. This explains the need for financial institutions to increase interest
rates charged on their products (Neumeyer and Perri, 2005). Financial institutions have
employees working for them and wa...

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