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Inflation, unemployment interest rates and investors. Options
Ebenezer Son
Posted: Saturday, August 29, 2020 2:25:52 PM
Rank: Advanced Member

Joined: 5/23/2013
Posts: 692
Neurons: 3,320
Hi everyone. hope you are fine
Please I need members to correct me of my understanding of inflation, unemployment and interest rates.
This is my knowledge of their correlations; inflation is the general rise in goos and services in a country in a certain period of time. Therefore an increase in inflation means there is much supply of money in a country and this has caused more money to chase few goods, more money in the country also signals lowered interest rates which motivated businesses to secure money from banks to increase their production causing unemployment to decrease as a result, this is because more production would require plenty labour. Money supply has increased due to lowered interest rates.And thus keeping investors away since no rational investor would like to invest in a low interest rates environment, this may induce investors to sell the currency of that particular country with an intention of buying a currency with strong value.

Please correct me if my knowledge of the above mentioned is stuff is incorrect or slightly incorrect, most especially what investors would do in such situations.
Many thanks.
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