The relationship between interest rates and stock prices is referred to as:

Question

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The relationship between interest rates and stock prices is referred to as the asset-price channel of monetary policy. As interest rates increase, borrowing costs for businesses increase, leading to decreased investment and potentially lower earnings for companies. This can cause a decrease in stock prices. Conversely, when interest rates decrease, borrowing costs decrease, leading to increased investment and potentially higher earnings for companies, which can cause an increase in stock prices.

The Relationship Between Interest Rates and Stock Prices Is Referred