The interest rate at which banks borrow and lend money is a key driver of the economy. Central banks use interest rates to manage economic prosperity and try to keep the economy growing at a sustainable pace that is neither too slow or too fast.
The video below describes how central banks use interest rates to manage economic growth and why that matters.
1. How do central banks manage interest rates?
2. What happens if the economy grows too fast? Too slow?
3. Are interest rates currently rising or falling? What does that mean for our economy in the months to come?
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