Ritically discuss the determinants of the rate of interest and the significance of interest rates to policy makers and other economic actors.

Critically discuss the determinants of the rate of interest and the significance of interest rates to policy makers and other economic actors.


Answer may include: definition of rate of interest, different rates of interest,  real and monetary theories, significance of interest rates for firms and individuals investment, consumption and savings decisions, liquidity trap, monetary policy, information in yield curve, empirical evidence.


students are expected to demonstrate:
” Evidence of reading beyond the study book. A solid reference list is based on reliable sources, such as journal articles, should be provided.
” Good understanding of key concept and ideas.
” Some imagination and originality. Not only should the relevant theories and evidence be presented, but also critically discussed and analysed.
” Development of argument so that the whole essay hangs together.
” Ability to structure the essay in a logical way and to write fluently.


Note: when given exmples or comparing to real life, exmaple from The GCC countries is prefered ( DUBAI, BAHRAIN, QATAR, etc).